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GLOBAL FORECAST BECOMES BLEAKER AS CANADA ENTERS RECESSION

Posted by Gilmour Poincaree on December 12, 2008

Thursday, December 11, 2008

AFP

PUBLISHED BY ‘THE MANILA TIMES’ (Philippines)

WASHINGTON, D.C.: The World Bank offered a grim 2009 outlook Tuesday of just 0.9 percent growth for the global economy, while a recession was declared in Canada and a rescue for US automakers hung in the balance.

In its “Global Economic Prospects” report, the World Bank sharply cut its growth forecast and predicted world trade volume would fall 2.1 percent as a worldwide credit crisis hits rich and poor nations alike.

Developing countries’ economies would likely expand at a reduced annual pace of 4.5 percent while wealthier, developed economies are expected to contract 0.1 percent, the multilateral development lender said.

“The global economy is at a crossroads, transitioning from a sustained period of very strong developing country-led growth to one of substantial uncertainty as a financial crisis rooted in high-income countries has shaken financial markets worldwide,” said World Bank chief economist Justin Lin.

In Canada, the central bank lowered its key interest rate Tuesday by 0.75 point to 1.50 percent and said the Canadian economy had slid into a recession amid the global financial crisis.

“The outlook for the world economy has deteriorated significantly and the global recession will be broader and deeper than previously anticipated,” the bank said in a statement.

In Washington, the White House demanded that Detroit automakers prove their “long-term viability” in return for a $15-billion rescue bailout but said a deal with Congress was in sight.

President George W. Bush’s administration is making “good progress” in its talks with congressional leaders over legislation to shore up General Motors, Ford and Chrysler, White House spokeswoman Dana Perino told reporters.

“We are still working through a number of issues, some of them just small and technical, and other ones a little bit more meaty in scope, but, all in all, making sure we’re headed in the right direction,” she said.

In Geneva, the International Air Transport Association forecast that airlines would likely lose $2.5 billion (1.9 billion euros) in 2009 due to the economic crisis.

“The outlook is bleak,” said Giovanni Bisignani, the association’s director general and chief executive.

“We face the worst revenue environment in 50 years.”

In Britain meanwhile, data showed manufacturing output sank 1.4 percent in October from September, the eighth monthly drop in a row, and was down 4.9 percent on a 12-month basis, the Office for National Statistics said.

The monthly fall was the largest decline since March 2005 and marks the country’s longest consecutive contraction in manufacturing output since 1980.

In Japan, Sony said it would cut investment in its electronics business by 30 percent, cut 10 percent of its manufacturing sites and exit unprofitable businesses to cope with the downturn.

The announcement came just hours after Tokyo said the Japanese economy shrank 0.5 percent in the third quarter—1.8 percent on an annualized basis—even worse than initially estimated.

“The data suggests that the economy is contracting faster than previously thought, and the depth of the recession will be more severe,” said Glenn Maguire, chief Asia economist at Societe Generale in Hong Kong.

CLICK HERE FOR THE ORIGINAL ARTICLE

PUBLISHED BY ‘THE MANILA TIMES’ (Philippines)

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Posted in BANKING SYSTEMS, CANADA, CENTRAL BANKS, ECONOMIC CONJUNCTURE, ECONOMY, ECONOMY - USA, FINANCIAL CRISIS - USA - 2008/2009, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, HOUSING CRISIS - USA, INTERNATIONAL, JAPAN, NATIONAL WORK FORCES, RECESSION, THE FLOW OF INVESTMENTS, THE LAST DAYS OF GEORGE WALKER BUSH - 2008/Jan. 2009, THE WORK MARKET, THE WORKERS, USA, WORLD BANK | Leave a Comment »

FRENCH ECONOMY SURPASSING U.K., REPORT FINDS

Posted by Gilmour Poincaree on December 11, 2008

December 8, 2008

Bloomberg News

PUBLISHED BY ‘THE INTERNATIONAL HERALD TRIBUNE’ (USA)

PARIS: The financial crisis is recasting the league table of economies, with Britain sliding behind its European neighbors and China gaining on its richer rivals, the Center for Economics and Business Research said in a study released Monday.

A recession and a decline in the pound’s value pushed Britain’s gross domestic product below France’s this year and it will be passed by Italy in 2009, the CEBR said in the report. China has overtaken Germany and will top Japan in 2010 to become the world’s second-largest economy behind the United States, it said.

“The recession associated with the credit crunch will change the position of many countries in the world’s GDP league table,” the London-based CEBR said in the report.

The study shows how countries that ran up debts during expansion, like Britain, will now suffer, while emerging-market economies will wield increasingly more power in the global economy as they develop. Governments from the Group of 7 nations are under pressure to broaden their membership to reflect the changing shape of the world economy.

Brazil will rise to eighth-biggest economy from 10th by 2010 and India to 10th from 12th, the CEBR said. Canada will drop to 13th from ninth in the same period as its currency falls, it said.

The CEBR also said the British and Italian economies would suffer the deepest downturns with 18 quarters of GDP below its previous peaks. Spain’s slump will last 16 quarters and Japan’s 11 quarters. The United States will rebound after nine quarters. China will not suffer a single quarter of contracting growth, the report said.

CLICK HERE FOR THE ORIGINAL ARTICLE

PUBLISHED BY ‘THE INTERNATIONAL HERALD TRIBUNE’ (USA)

Posted in BANKING SYSTEMS, BRASIL, CANADA, CHINA, COMMERCE, ECONOMIC CONJUNCTURE, ECONOMY, ECONOMY - USA, ENGLAND, FINANCIAL CRISIS - USA - 2008/2009, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, GERMANY, INDUSTRIAL PRODUCTION, INDUSTRIES, INTERNATIONAL, ITALY, JAPAN, MACROECONOMY, RECESSION, SPAIN, THE FLOW OF INVESTMENTS, THE LAST DAYS OF GEORGE WALKER BUSH - 2008/Jan. 2009, UNITED KINGDOM, USA | Leave a Comment »

MARKETS CAN’T RULE THEMSELVES – A ‘made in the U.S.A.’financial crisis highlights the need for more global—and more robust—oversight

Posted by Gilmour Poincaree on December 11, 2008

December 2008 – february 2009

by Joseph Stiglitz – (*)

PUBLISHED BY ‘NEWSWEEK – Special Edition – ISSUES 2009’ (USA)

For years, there has been an ongoing discussion among world leaders and thinkers about deficiencies in the international financial architecture and about economic imbalances, GROUND ZERO - Wall Street exported troubles to the world; it needs world help to fix themincluding the widening U.S. trade deficit. Many worried about a disorderly unwinding of these imbalances. Nothing was done. We are now paying the price for our failure to act. Ten years ago, the fear was that financial turmoil in the developing world might spill over to the advanced industrialized countries. Today, we are in the middle of a “made in the U.S.A.” crisis that is threatening the entire world.

If we are going to address this worldwide crisis and prevent a recurrence, we must reform and reconfigure the global financial system. There are simply too many inter-dependencies to allow each country to go its own way. For example, the United States benefited from its export of toxic mortgages; had it not sent some of them to Europe via complex securitization, its downturn would have been far worse. But the resulting weaknesses in Europe’s banks are now ricocheting back to the United States.

Better regulation would have helped prevent such a situation. But the reform of the global financial system must go much further. For example, there must be better monetary-policy coordination around the world. Europe’s current slowdown is due in part to the fact that while the European Central Bank spent the past year focusing on inflation, the United States was (rightly) focusing on the impending recession. The resulting difference in interest rates led to a strong euro and weak exports. That hurt Europe. But a weak Europe eventually hurts the United States, as Europe is forced to reduce its imports of American goods. With better coordination, perhaps America would have been able to convince Europe of the risks of recession, and that would have led to moderation of Europe’s interest rates.

There is also a need for internationally coordinated stimulus programs to help jump-start growth. It is good news that China, the United States and Japan have now all instigated major programs of fiscal expansion. But they are of vastly different sizes, and so far, Europe’s is lagging behind. Its growth and stability pact imposes constraints that may have global consequences. Beyond this, confidence in financial markets will not be fully restored unless governments take a stronger role in regulating financial institutions, financial products and movements of capital. Banks have shown that they can’t manage their own risk, and the consequences for others have been disastrous. Even former Fed chairman Alan Greenspan, the high priest of deregulation, admits he went too far.

What we need now is a global financial regulatory body to help monitor and gauge systemic risk. If financial rules are allowed to vary too widely from nation to nation, there is a risk of a race to the bottom — some nations will move toward more lax regulation to capture financial business at the expense of their competitors. The financial system will be weakened, with consequences that are now all too apparent.

What should this” new set of global financial rules encompass? For starters, it should ensure that managerial incentive schemes are transparent and do not provide perverse encouragement for bad accounting, myopic behavior and excessive risk taking. Compensation should be based on returns not from a single year but over a longer time period. At the very least, we should require greater transparency in stock options, including making sure that they receive appropriate accounting treatment. And we need to restrict the scope for conflicts of interest — whether among rating agencies being paid by those they are rating, or mortgage companies owning the companies that appraise the properties on which they issue mortgages. We need to restrict excessive leverage, and other very risky behavior. Standardization of financial products would enhance transparency. And financial-product safety and stability commissions could help decide which products were safe for institutions to use, and for what purposes. We have seen what happens if we rely on bankers to regulate banking.

Beyond better global coordination of macroeconomic policy and regulation, there are at least two other actions governments should take. First, we need a reform of the global reserve system. More than 75 years ago, John Maynard Keynes, the greatest economist of his generation, wrote that a global reserve system was necessary for financial stability and prosperity; since then the need has become much more dire. Keynes’s hope was that the International Monetary Fund would create a new global reserve currency that countries would hold instead of sterling (the reserve of the time). Today, such a currency could be used to replace the dollar as the de facto reserve currency. Because it would not depend on the fortunes of any one country, it would be more stable. Supply could be increased on a regular basis, ensuring that reserves kept up with countries’ needs. Issuance could be done on the basis of simple rules—including punishment for countries that caused global weaknesses by having persistent surpluses. This is an idea whose time may have finally come.

The other major reform should be a new system of handling cross-border bankruptcies (including debt defaults by sovereign states). Today, when a bank or firm in one country defaults, it can have global ramifications. With various national legal systems involved, the tangle may take years to unwind. For example, the problems arising from Argentina’s 2001 default are still not resolved, and bankruptcy complications plagued South Korea and Indonesia during their crises a decade ago, slowing down the process of recovery. The world may soon be littered with defaults, and we need a better way of handling them than we have had in the past.

This crisis has highlighted not only the extent of our inter-dependencies but the deficiencies in existing institutions. The IMF, for instance, has done little but talk about global imbalances. And as the world has focused on problems of governance as an impediment to development, deficiencies in the IMF’s own governance meant its lectures had little credibility. Its advice, especially that encouraging deregulation, seems particularly hollow today. Many critics in Asia and the Middle East, where pools of liquid capital dwarf die IMF’s own, are wondering why they should turn over their money to an institution in which the United States, the source of the problem, still has veto power, and in which diey have so little voting power.

This is a Bretton Woods moment — a time for dramatic reforms of existing institutions” or, as was done at the end of World War II, the creation of new ones. Until now, Washington has consistently blocked efforts to create a multilateral global financial system that is stable and fair. It exported the deregulatory philosophy that has proved so costly, both to itself and to the world. President Obama has an opportunity to change all this. Much depends — now and for decades to come — on his response.

(*) – Joseph Stiglitz is a Nobel laureate in economics and a professor at Columbia University.

Posted in BANKING SYSTEM - USA, BANKING SYSTEMS, BANKRUPTCIES - USA, CENTRAL BANKS, CHINA, ECONOMIC CONJUNCTURE, ECONOMY, ECONOMY - USA, EUROPE, FINANCIAL CRISIS - USA - 2008/2009, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, FINANCIAL SCAMS, FOREIGN POLICIES, FOREIGN POLICIES - USA, FRAUD, HISTORY, HOUSING CRISIS - USA, INTERNATIONAL, INTERNATIONAL RELATIONS, JAPAN, MACROECONOMY, RECESSION, REGULATIONS AND BUSINESS TRANSPARENCY, THE EUROPEAN UNION, THE FLOW OF INVESTMENTS, THE LAST DAYS OF GEORGE WALKER BUSH - 2008/Jan. 2009, USA | Leave a Comment »

INDITEX GANÓ 843 MILLONES EN LOS NUEVE PRIMEROS MESES, UN 2% MÁS – Las ventas crecieron un 11% entre febrero y octubre, y alcanzaron los 7.353 millones de euros, un incremento que, a tipo de cambio y perímetro constante, se eleva hasta el 14%

Posted by Gilmour Poincaree on December 11, 2008

11/12/2008 08:07

PUBLISHED BY ‘LA GACETA DE LOS NEGOCIOS’ (Spain)

Madrid. Inditex registró un beneficio neto de 843 millones de euros en los nueve primeros meses de su ejercicio fiscal, lo que supone un incremento del 2% respecto al resultado obtenido en el mismo periodo del año anterior, un 4% más a perímetro constante, informó hoy la compañía a la Comisión Nacional del Mercado de Valores (CNMV).

El grupo textil explicó que sus ventas crecieron un 11% entre febrero y octubre, y alcanzaron los 7.353 millones de euros, un incremento que, a tipo de cambio y perímetro constante, se elevó hasta el 14%.

La compañía precisó que, transcurridas seis semanas desde el inicio del cuarto trimestre del ejercicio 2008, las pautas de crecimiento son “similares a las del tercer trimestre”.

El margen bruto de la compañía avanzó un 12%, con lo que se situó en 4.235 millones de euros, y supuso el 57,6% de las ventas. El beneficio bruto de explotación (Ebitda) subió un 5% y se colocó en los 1.545 millones de euros, mientras que el beneficio neto de explotación (Ebit), por su parte, repuntó un 2%, hasta 1.132 millones de euros.

Crecer sin recurrir al endeudamiento

La compañía que preside Amancio Ortega destacó su “fuerte capacidad de generación de caja”, cuya posición neta se incrementó un 9%, hasta 525 millones de euros, lo que le permitió financiar su crecimiento “sin recurrir al endeudamiento”.

En los nueve primeros meses, el grupo abrió un total de 456 nuevas tiendas, 45 más que en el mismo periodo del año anterior, con una inversión de 806 millones. De esta forma, al cierre de octubre Inditex contaba con 4.147 tiendas en 71 países, 456 más que al inicio del ejercicio.

Apuesta por Asia y Europa del Este

Entre los mercados en los que se produjo un mayor incremento en la presencia comercial destaca Rusia, donde el número de tiendas casi se ha duplicado desde el inicio del ejercicio. Otras aperturas reseñables son la tienda Zara inaugurada en Tokio, con la que el grupo alcanzó los 4.000 puntos de venta, así como las primeras tiendas en Montenegro, donde el grupo ha lanzado simultáneamente las cadenas Zara, Pull and Bear, Bershka, Stradivarius y Oysho.

Por su parte, Uterqüe, cadena especializada en accesorios, alcanzaba un total de 24 tiendas a 31 de octubre, entre ellas las primeras en Portugal.

Asimismo, el grupo creó un total de 7.171 nuevos empleos en los nueve primeros meses, de forma que la plantilla de la compañía estaba integrada por 86.688 personas al cierre de octubre. (ep)

CLICK HERE FOR THE ORIGINAL ARTICLE

PUBLISHED BY ‘LA GACETA DE LOS NEGOCIOS’ (Spain)

Posted in ASIA, BANKING SYSTEMS, COMMONWEALTH OF INDEPENDENT STATES, ECONOMIC CONJUNCTURE, ECONOMY, EUROPE, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, GARMENT INDUSTRIES, INDUSTRIAL PRODUCTION, INDUSTRIES, INTERNATIONAL, JAPAN, REGULATIONS AND BUSINESS TRANSPARENCY, RUSSIA, SPAIN, STAGFLATION, STOCK MARKETS, THE FLOW OF INVESTMENTS, THE WORK MARKET | Leave a Comment »

THE BIG THREE NEED A SHAKEOUT, NOT A BAILOUT

Posted by Gilmour Poincaree on December 9, 2008

Tuesday, December 9th, 2008

by Keith Fitz-Gerald – Investment Director

PUBLISHED BY ‘MONEY MORNING’

Money Morning/The Money Map Report

I don’t know about you, but my jaw literally hit the floor when the chief executives of Detroit’s “Big Three” begged for a taxpayer-funded bailout. Never mind that General Motors Corp (GM), Ford Motor Co. (F) and Chrysler LLC are now seeking an aggregate $34 billion – which is up 36% from the $25 billion the Big Three was seeking just two weeks ago – or that they “drove” to Capitol Hill in a caravan of new hybrids so shiny they could’ve made the Keystone Cops green with envy.

And now that negotiations are under way to “advance” the three U.S. automakers $15 billion from an existing loan program, I don’t know whether to laugh … or to cry, since the total amount actually needed may be north of $150 billion.

The bottom line: Detroit doesn’t need a bailout.

It needs a shakeout.

How to Really Assess the Big Three’s Health

Nothing drove that point home more than when Ford CEO Alan R. Mulally who, after admitting “big mistakes,” attempted to sway Congressional members by saying that “we’re really focused now.”

I may not be the brightest bulb in the bunch here, but it seems to me I’ve heard this same mea culpa before – several times. Indeed, wasn’t that what the Big Three said:

– Back in the 70s, after Japanese-made cars that were better made and more economical started grabbing huge swaths of U.S. market share.

– Back in the 80s when U.S. quality began to suffer badly.

– And again back in the 90s when they tossed their lot in with SUVs and trucks.

But I really have to question whether GM, Ford and Chrysler were “really focused” after supposedly beating back each of these challenges, since the Big Three has seen its market share drop from more than 70% then to less than 50% today.

They’re so “focused” I can’t stand it. And I can only wonder what they’ll say when Chinese automakers hit our shores in the next few years, rolling out cars that sell for 30% less than it costs Detroit to make cars for.

Even at their new salaries of $1 a year, the Big Three’s top leaders are overpaid in my book – but I digress.

The so-called Big Three are nowhere near the anchor of American industry that Detroit would have us believe. And the arguments they’re using are superficial – at best. Maybe that’s good enough to bamboozle some people, but I believe that the American public is smarter than that. I can’t speak for our elected leaders who seem hell bent for leather on sticking band-aids on all our serious problems, but that, too, is another story for another time.

Essentially, the carmakers’ case boils down to this: Each of the Big Three – GM, Ford and Chrysler – contribute billions of dollars to the U.S. economy, and directly or indirectly employ three million Americans. Thus, by allowing any or all of the automakers to fail, lawmakers would be making a major economic misstep.

That might be true, but not for the reasons the automakers have stated.

The Big Three are manufacturers. You don’t measure their success or failure by how much they purchase. You measure it by how much they sell, whether their market share is rising or falling, and what customers are saying about the quality and functionality of the finished product.

Economics 101

That brings us to the basics of supply and demand. If you recall your freshman-level Economics 101 course, “supply” is the total amount of goods and services (in this case cars and related support services) available for purchase. Demand is the amount of a particular good or services that a consumer or consumers will want to purchase at a given price.

Demand curves are normally downward sloping because consumers typically buy less of an item as its price increases. Similarly, supply curves are upward sloping because producers are willing to supply increasing amounts of their wares at increasingly higher prices. A bit of an oversimplification, perhaps, but it makes the general point.

In their rush to portray their industry as an economic linchpin and supplier of key future technologies – not to mention as a “victim” of the worst financial crisis since The Great Depression – the U.S. automakers are forgetting that their failure will not bring about a total destruction of demand. History is literally littered with failed companies. Demand for cars won’t fall off because the Big Three go under anymore than folks would stop buying beer if Annheuser-Busch Cos. Inc. (the maker of Budweiser that’s now Annheuser-Busch InBev NV) were to collapse and disappear.

What’s far more likely to happen is that Japan’s Honda Motor Co. (ADR: HMC) and Toyota Motor Co. (ADR: TM), India’s Tata Motors Ltd. (ADR: TTM), Germany’s Daimler AG (DAI) and Bayerische Motoren Werke AG (BMW), China’s Chery Automobile Co. Ltd. and Geely Automobile Holdings Ltd., and other companies from around the world will happily fill the void.

In fact, I’m certain that these companies will not only absorb key elements of the purchasing chain, but the workers, too. History shows that industry consolidation is actually a positive influence for the remaining companies and their workers. History also demonstrates that during periods of industry consolidation, there really isn’t anything other than short-term loss in business activity.

In short, if the demand is there, other firms will move in.

What Detroit is actually seeking is a bailout that preserves the status quo, and that implicitly rewards 40 years of inept management, bad decisions and poor quality. But to my way thinking, it makes no sense whatsoever to throw $34 billion at businesses that are losing $6 billion a month.

Like the other federal bailouts that I’ve opposed (as a proponent of free markets and the Austrian school of economics, I believe that bailouts are fundamentally wrong), a taxpayer-funded bailout of the U.S. auto sector would do nothing to improve Detroit’s competitive position. Instead, the capital would serve as little more than a punitive tax on such successful companies as Toyota and Honda, just to name two of the most obvious that would suffer. It would also allow Detroit to come back for more money after they blow through whatever we give them now. In the end, that will hurt both the consumer and the taxpayer – in most cases, one and the same.

Congressional sources are saying that that before the Big Three gets a cent, they would each have to make concessions similar to those extracted from the U.S. financial-services sector. Not only would the automakers have to eradicate their dividends and guarantee repayment, they’d also have to willingly submit to government control, just in case things didn’t play out as planned.

Maybe I’m the only one who sees a problem with this but such a change would mean that the same people who have been running the U.S. Postal Service would not be in charge of both Wall Street and one of our major manufacturing industries.

No thank you.

There are still plenty of strong automobile companies operating in the U.S. market that are able to offer of successful products that range from ultra-plain utilitarian models to all sorts of luxury vehicles, with to large-scale trucks in between.

And if the Big Three were to fail, still more auto firms will come to the United States, as their many foreign predecessors did in the years before.

So here’s to the natural order of things and, hopefully, a levelheaded Congress that will let the markets take their natural course and force a shakeout – and not a bailout.

CLICK HERE FOR THE ORIGINAL ARTICLE

PUBLISHED BY ‘MONEY MORNING’

Posted in AUTOMOTIVE INDUSTRY, BANKING SYSTEM - USA, BANKRUPTCIES - USA, CHINA, COMMERCE, COMMODITIES MARKET, ECONOMIC CONJUNCTURE, ECONOMY, ECONOMY - USA, FINANCIAL CRISIS - USA - 2008/2009, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, FOREIGN POLICIES - USA, GERMANY, INDIA, INDUSTRIAL PRODUCTION - USA, INDUSTRIES - USA, INTERNATIONAL, INTERNATIONAL RELATIONS, JAPAN, MACROECONOMY, NATIONAL WORK FORCES, RECESSION, REGULATIONS AND BUSINESS TRANSPARENCY, STOCK MARKETS, THE LAST DAYS OF GEORGE WALKER BUSH - 2008/Jan. 2009, THE WORK MARKET, THE WORKERS, USA | Leave a Comment »

NO ROOM FOR WISHFUL THINKING – THE SLUMP IS HERE WITH A VENGEANCE (USA)

Posted by Gilmour Poincaree on December 9, 2008

Saturday December 6 2008

by Larry Elliott, Economics Editor – The Guardian

PUBLISHED BY ‘THE GUARDIAN’ (UK)

The shocking jobs data from the US yesterday should remove the last doubt about the potential of the current crisis to turn into the most serious economic shock to the global economy since the 1930s.

The fact that the world’s biggest economy shed 533,000 jobs last month smacks of a slump. While it is unlikely to prove as long and as deep as the Great Depression, more jobs were lost last month than at any time since 1974, when the decision by Opec to turn off the oil taps brought the postwar boom to a shuddering halt.

To make matters worse, the jobless figures for September and October were revised sharply higher so that payrolls were down by 1.25 million over the latest quarter.

Some analysts saw hope in the fact that the unemployment rate rose only modestly from 6.5% to 6.7%. But that was because more than 400,000 people left the labour force altogether last month, presumably on the grounds that there was no prospect of finding work.

Nor was this a temporary shakeout precipitated by the collapse of Lehman Brothers. Revisions to the back data show payrolls were down by more than 400,000 in September, before the escalation in the financial crisis had any effect.

Apart from any impact on shares, bonds and the dollar, yesterday’s woeful jobs data will have three consequences. If 1.25 million people suddenly stop earning a wage, there will be an impact on consumer spending. And if consumers are not spending, companies are not going to invest – even assuming that they can get the finance. We are likely to see output contract at an annual rate of about 4% in the fourth quarter – and it could be even worse. And what happens to America matters to everybody else, especially the big exporting nations: China, Germany, South Korea, Japan.

The second effect will be social. America does not have the generous welfare nets enjoyed in Europe, so unless those made jobless can quickly find work, there will be hardship, poverty and the threat of disorder.

The need to put people back to work leads to the third consequence. There will be further interest rate cuts by the Federal Reserve and other “unconventional” measures to drive down long-term rates. There will be suggestions that America can’t wait for the $500bn fiscal stimulus the president-elect is planning. And there will be help for the motor industry. One of the few Americans likely to have found hope in yesterday’s report will be Rick Wagoner, the boss of General Motors.

CLICK HERE FOR THE ORIGINAL ARTICLE

PUBLISHED BY ‘THE GUARDIAN’ (UK)

Posted in AUTOMOTIVE INDUSTRY, BANKING SYSTEM - USA, BANKRUPTCIES - USA, CENTRAL BANKS, CHINA, COMMERCE, CONSUMERS AND PSYCHOLOGICAL FACTORS, ECONOMIC CONJUNCTURE, ECONOMY, ECONOMY - USA, EUROPE, FINANCIAL CRISIS - USA - 2008/2009, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, FOREIGN POLICIES, GERMANY, INDUSTRIAL PRODUCTION - USA, INDUSTRIES - USA, INTERNATIONAL RELATIONS, JAPAN, MACROECONOMY, NATIONAL WORK FORCES, RECESSION, REGULATIONS AND BUSINESS TRANSPARENCY, SOUTH KOREA, STOCK MARKETS, THE EUROPEAN UNION, THE LAST DAYS OF GEORGE WALKER BUSH - 2008/Jan. 2009, THE WORK MARKET, THE WORKERS, USA | Leave a Comment »

NEWS ANALYSIS: TAKING RISKS WITH BAILOUT FOR AUTOMAKERS (USA)

Posted by Gilmour Poincaree on December 9, 2008

Published: December 9, 2008

by David E. Sanger

PUBLISHED BY ‘THE INTERNATIONAL HERALD TRIBUNE’ (USA)

WASHINGTON: When President-elect Barack Obama talked on Sunday about realigning the American automobile industry he was quick to offer a caution, lest he sound more like the incoming leader of France, or perhaps Japan.

“We don’t want government to run companies,” Obama told Tom Brokaw on “Meet the Press.” “Generally, government historically hasn’t done that very well.”

But what Obama went on to describe was a long-term government bailout that would be conditioned on government oversight. It could mean that the government would mandate, or at least heavily influence, what kind of cars companies make, what mileage and environmental standards they must meet and what large investments they are permitted to make — to recreate an industry that Obama said “actually works, that actually functions.”

It all sounds perilously close to a word that no one in Obama’s camp wants to be caught uttering: nationalization.

Not since Harry Truman seized America’s steel mills in 1952 rather than allow a strike to imperil the conduct of the Korean War has Washington toyed with nationalization, or its functional equivalent, on this kind of scale. Obama may be thinking what Truman told his staff: “The president has the power to keep the country from going to hell.” (The Supreme Court thought differently and forced Truman to relinquish control.)

The fact that there is so little protest in the air now — certainly less than Truman heard — reflects the desperation of the moment. But it is a strategy fraught with risks.

The first, of course, is the one the president-elect himself highlighted. Government’s record as a corporate manager is miserable, which is why the world has been on a three-decade-long privatization kick, turning national railroads, national airlines and national defense industries into private companies.

The second risk is that if the effort fails, and the American car companies collapse or are auctioned off in pieces to foreign competitors, taxpayers may lose the billions about to be spent.

And the third risk — one barely discussed so far — is that in trying to save the nation’s carmakers, the United States is violating at least the spirit of what it has preached around the world for two decades. The United States has demanded that nations treat American companies on their soil the same way they treat their home-grown industries, a concept called “national treatment.”

Yet so far, there is no talk of offering aid to Toyota, Honda, BMW or the other foreign automakers that have built factories on American soil, employed American workers and managed to make a profit doing so.

“If Japan was doing this, we’d be threatening billions of dollars in retaliation,” said Jeffrey Garten, a professor at the Yale School of Management, who as under secretary of commerce in the 1990s was one of many government officials who tried in vain to get Detroit prepared for a world of international competition. “In fact, when they did something a lot more subtle, we threatened exactly that,” referring to calls for import restrictions.

Garten said he was stunned by the scope of the intervention that Washington was now considering. “I don’t know that we’ve seen anything like this since the government told the automakers what kind of tanks to make during World War II,” he said. “And that was just for the duration of the war — this could be for much, much longer.”

It is hard to measure just what kind of chances Obama may be taking with this plan, in part because so many parts of it are still in motion.

In the short term, Democrats are floating the idea of linking $15 billion in immediate loans to the designation of a “car czar” who, in doling out the money, could require or veto big transactions or investments — essentially a one-man board of directors. The White House indicates that President George W. Bush, who has spent his entire presidency proclaiming that the government’s role is to create an environment that spurs free enterprise and minimizes government regulation, would very likely sign the rescue plan.

The first $15 billion and the car czar who oversees it, however, are only the beginning. “After that, we’re in uncharted water,” said Malcolm Salter, a professor emeritus at Harvard Business School who has studied the auto industry for two decades and, until a few years ago, was an adviser to General Motors and Ford. “Think about this: Who in the federal government would have the tremendous insight needed to fix this industry?”

Depending on how the longer-term revamping of the industry proceeds, Washington could become a major shareholder in the Big Three, it could provide loans, or, in one course that Obama seemed to hint at on Sunday, it could organize what amounts to a “structured bankruptcy.” In that case, the government would convene the creditors, the unions, the shareholders and the company’s management, and apportion a share of the hit to each of them. If that “consensus building” sounds a lot like the role of the Japanese Ministry of International Trade and Industry in the 1970s and the 1980s, well, it is.

To promote the Japanese car industry on the way up, the trade ministry nudged companies toward consolidation, and even tried to mandate which parts of the market each could go into. (Soichiro Honda, the founder of the company, rebelled when bureaucrats told him he was supposed to limit himself to making motorcycles.) By the 1980s, Congress was denouncing this as “industrial policy,” and arguing that it put American makers at a competitive disadvantage — and polluted free enterprise.

Now, it is Congress doing exactly that, but this time as emergency surgery. Other nations will doubtless complain, or begin doing the same for their own companies. “We’re at this moment in history, in which the Chinese are touting that their system is better than ours” with their mix of capitalism and state control, said Garten, who has long experience in Asia. “And our response, it looks like, is to begin replicating what they’ve been doing.”

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Posted in AUTOMOTIVE INDUSTRY, BANKING SYSTEM - USA, BARACK HUSSEIN OBAMA -(DEC. 2008/JAN. 2009), CHINA, COMMERCE, COMMODITIES MARKET, ECONOMIC CONJUNCTURE, ECONOMY, ECONOMY - USA, FINANCIAL CRISIS - USA - 2008/2009, FINANCIAL CRISIS 2008/2009, INDUSTRIAL PRODUCTION - USA, INDUSTRIES - USA, JAPAN, MACROECONOMY, RECESSION, REGULATIONS AND BUSINESS TRANSPARENCY, THE FLOW OF INVESTMENTS, THE LAST DAYS OF GEORGE WALKER BUSH - 2008/Jan. 2009, THE WORK MARKET, THE WORKERS, USA | 1 Comment »

ECONOMIC STIMULUS PLANS SPRING UP AROUND WORLD

Posted by Gilmour Poincaree on December 3, 2008

Published Tuesday, December 2, 2008

THE WASHINGTON POST

PUBLISHED BY ‘THE OMAHA WORLD-HERALD’ (USA)

WASHINGTON — In a bid to jump-start the beleaguered global economy, countries around the world are introducing massive public spending programs aimed at creating millions of jobs, boosting the use of green energy and modernizing infrastructure in a way that could transform urban and rural landscapes.

The viability of some of the plans remains unclear. But observers say the number of countries moving in tandem underscores the perceived severity of the coming global recession and the view that governments must at least temporarily pick up the slack as the hard-hit private sector sheds jobs and cuts spending.

It is time “to invest massively in infrastructure, in research, in innovation, in education, in training people, because it is now or never,” French President Nicolas Sarkozy said in a recent public address.

World leaders are pursuing various strategies to tame the economic crisis, including moves to unclog credit markets, strengthen financial institutions and ease monetary policy. But fiscal stimulus packages, in particular, have emerged as a favorite tool of policymakers.

Worldwide, economists say, the increase in public spending, if executed wisely, could add as much as 1 percent or 2 percent to global growth next year, perhaps easing recessions in the United States, Europe and Japan while cushioning the slowdown in the developing world, which until recently had seen red-hot growth.

Yet if the promise of combating a global recession with public funds is big, so too, experts say, is the danger that billions worth of taxpayers dollars could be spent in vain.

Analysts point out that the pitfalls of growth-by-spending were exposed by Japan, which launched a huge infrastructure program in the 1990s. To spur expansion after stock market and real estate crashes, the Tokyo government spent billions on new public works projects.

Those projects not only failed to prevent a decadelong economic slump but also produced a herd of white elephants that included new, but little-used, airports and ports, as well as a $250 million bridge to Kourijima Island. Population: 361.

“There is a huge danger of bridges to nowhere, and as Japan showed us, that is no way to get out of a recession,” said Grant Aldonas, a former high-level Bush administration trade official and a senior fellow at the Center for Strategic and International Studies.

While China and Japan enjoy a surplus of reserves, spending increases will drive the United States, Britain and many other European countries deeper into debt. The cost of raising cash on world markets by some rich nations, such as Ireland, has surged as investors grow increasingly skeptical of their fiscal health, limiting their options to spend more now.

“In normal times, we would be telling countries, ‘Please reduce your debt,'” said Olivier Blanchard, chief economist at the International Monetary Fund, which has taken the unusual step of calling on nations to raise public spending by 2 percent of gross domestic product to combat a global recession. “But these are not normal times.”

A snapshot of how governments plan to increase spending is emerging. Those plans include not only the building of more bridges and roads but also the introduction of measures to put more cash into the hands of strapped consumers.

In the United States, the Federal Reserve and Treasury Department have moved to boost consumer spending and lower home mortgage rates, committing as much as $800 billion to make it easier for Americans to borrow money for cars, tuition and homes.

The British said they would slash the national sales tax from to 15 percent from 17.5 percent. The Germans are set to offer temporary tax incentives to consumers buying cars or renovating homes. The Japanese are giving out cash rebates to taxpayers.

Some of the projects being proposed are pre-existing infrastructure plans that are being accelerated. Nicholas Lardy, a senior fellow at the Peterson Institute for International Economics, estimates that only about half the “new projects” in Beijing’s $586 billion package amount to previously unplanned spending. “But that is still a great deal of money,” Lardy said.

A number of countries are gearing up for projects that offer long-term benefits, both economic and environmental.

In a move that may offer a guide to helping the ailing Big Three automakers in Detroit, the French are in the early stages of plans to assist their hard-hit auto industry by awarding government grants to boost research into hybrid and battery-power technology.

In comments last week, president-elect Barack Obama suggested that an expansion of wind and solar power generation would be part of his stimulus plans. Obama also cited a plan being circulated by environmental groups that would offer government loans to help schools update their heating and cooling systems, creating quick construction jobs and stimulating demand for building materials.

“I think the fervor in which (the Obama team) is seeking suggestions right now tells me that this kind of spending is something they are very serious about,” said Carl Pope, executive director the Sierra Club.

Some countries in Europe, such as Germany, appear more concerned about overspending. That is at odds with the leadership in France, where Sarkozy has seen the crisis as an opportunity to boost the role of government.

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Posted in BANKING SYSTEM - USA, BANKING SYSTEMS, BARACK HUSSEIN OBAMA -(DEC. 2008/JAN. 2009), BIOFUELS, CENTRAL BANKS, CHINA, COMMERCE, ECONOMIC CONJUNCTURE, ECONOMY, ECONOMY - USA, ENERGY, ENERGY INDUSTRIES, EUROPE, FINANCIAL CRISIS - USA - 2008/2009, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, FRANCE, GERMANY, HOUSING CRISIS - USA, IMF, INDUSTRIAL PRODUCTION, INDUSTRIAL PRODUCTION - USA, INDUSTRIES, INTERNATIONAL, JAPAN, MACROECONOMY, MARITIME, NATIONAL WORK FORCES, RAILWAY TRANSPORT, RECESSION, ROAD TRANSPORT, SOLAR, THE FLOW OF INVESTMENTS, THE LAST DAYS OF GEORGE WALKER BUSH - 2008/Jan. 2009, THE WORK MARKET, THE WORKERS, UNITED KINGDOM, USA | Leave a Comment »

BOJ EXPANDS LENDING FOR FIRMS (Japan)

Posted by Gilmour Poincaree on December 3, 2008

Wednesday, December 03, 2008

REUTERS, BLOOMBERG

PUBLISHED BY ‘THE STANDARD’ (Hong Kong – China)

The Bank of Japan said it will expand lending by about 3 trillion yen (HK$250 billion) to help companies tide over a year-end BANK OF JAPAN - SPAINcredit squeeze and accept lower rated corporate bonds as collateral for loans.

The central bank, which kept rates steady at 0.3 percent at an emergency meeting yesterday, said it plans to accept triple B-rated corporate bonds as collateral which would make it easier for banks, scarred by the global financial crisis, to lend to companies.

The move in Japan came as a private nonprofit group of economists said the United States is now in recession and the US economy may be in the midst of the longest slump in the post-World War II era as job losses mount and credit dries up. The economic slump began in December 2007, the National Bureau of Economic Research said.

The Federal Reserve might buy Treasury securities to spur growth.

REUTERS, BLOOMBERG

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Posted in BANKING SYSTEM - USA, BANKING SYSTEMS, CENTRAL BANKS, DOLLAR (USA), ECONOMIC CONJUNCTURE, ECONOMY, ECONOMY - USA, FINANCIAL CRISIS - USA - 2008/2009, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, HOUSING CRISIS - USA, INTERNATIONAL, JAPAN, RECESSION, THE FLOW OF INVESTMENTS, THE LAST DAYS OF GEORGE WALKER BUSH - 2008/Jan. 2009, THE PRESIDENCY - USA, USA, YEN (Japan) | Leave a Comment »

MITSUBISHI MATERIALS CORPORATION ADVANCES $28.75 MILLION FOR COPPER MOUNTAIN PROJECT

Posted by Gilmour Poincaree on December 3, 2008

December 2, 2008

PUBLISHED BY ‘CNW GROUP’ (Canada)

TSX: CUM – VANCOUVER, Dec. 1 /CNW/ – Copper Mountain Mining Corporation (“CMMC” or the “Company”) is pleased to announce that Mitsubishi Materials Corporation (“Mitsubishi”) has agreed to advance up to Cdn$28.75 Million by way of a bridge-loan to Similco Mines Ltd. (“Similco”), a wholly-owned subsidiary of the Company. Similco holds the assets of the former Similco mine, which the Company plans to re-develop into a producing mine (the “Project”). The funds will be used for development activities necessary to achieve the planned production start for the Project at the end of 2010. The Company and Mitsubishi continue to work on the definitive agreements in accordance with the MOU announced on October 1, 2008 and it is anticipated that the definitive agreements will be finalized as soon as possible. Mr. O’Rourke, Chief Executive Officer of the Company stated: “I am extremely pleased that Mitsubishi agrees to help us develop this Project by the bridge-loan in a very challenging financial time. Despite the current economic turbulence, we have added confidence that the project will be developed within the budget and schedule. We are taking a long term positive view on the price of copper and expect an improvement in the global economic situation by 2011 when the mine is scheduled to be operating.”

About Mitsubishi Materials Corporation:

Established in 1950, Mitsubishi is one of the world’s largest diversified materials companies and is a leader in metal smelting and refining, cement products, fabricated metals and advanced materials for electric components. Mitsubishi has invested in 4 (four) copper mines now under operation, namely Los Pelambres, Escondida (both in Chile), Huckleberry (Canada) and Batu Hijau (Indonesia). Mitsubishi’s high-level research and development programs are instrumental in enabling it to maintain its dominant position in key markets. Mitsubishi comprises 227 subsidiaries and affiliates in 25 countries, employing 19,467 people.

About Copper Mountain Mining Corp.:

CMMC is a BC resource company that owns 100% of the Project located 15 km south of the town of Princeton in southern British Columbia. The Company recently completed an independent feasibility study that confirmed the viability of restarting this past open pit copper and precious metal producer. Development is based on the construction of a new 35,000 tonne per day concentrator to produce approximately 100 million pounds of copper per year in a copper concentrate with gold and silver credits by the end of 2010. The mine resource includes; a Measured and Indicated Mineral Resource of 186 million tons averaging 0.411% Cu containing 1.5 billion lbs copper and an Inferred Resource of 92 million tons averaging 0.344% Cu containing 0.6 billion lbs copper (see press release July 28, 2008). A copy of the Independent 43-101 Technical Report pertaining to the interim resource estimate and a video presentation on the Copper Mountain Project may be found on the company’s website. The Company’s common shares currently trade on the TSX Exchange under the symbol CUM and additional information is available on the Company’s web site at http://www.CuMtn.com.

On behalf of the Board of COPPER MOUNTAIN MINING CORPORATION

“Rodney A. Shier”

Rodney A. Shier Chief Financial Officer

Note: This release contains forward-looking statements that involve risks and uncertainties. These statements may differ materially from actual future events or results. Readers are referred to the documents, filed by the Company on SEDAR at http://www.sedar.com, specifically the most recent reports which identify important risk factors that could cause actual results to differ from those contained in the forward-looking statements. The Company undertakes no obligation to review or confirm analysts’ expectations or estimates or, subject to the requirement of securities laws, to release publicly any revisions to any forward-looking statement.

For further information: Don Graham: Director, Investor Relations, (604) 682-2992 ext. 224, Email: don@CuMtn.com, Website: http://www.CuMtn.com, or B&D Capital, (604) 685-6465

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PUBLISHED BY ‘CNW GROUP’ (Canada)

Posted in COMMODITIES MARKET, COPPER, ECONOMIC CONJUNCTURE, ECONOMY, FINANCIAL MARKETS, INDUSTRIAL PRODUCTION, INTERNATIONAL, JAPAN, METALS INDUSTRY, MINING INDUSTRIES, THE FLOW OF INVESTMENTS | Leave a Comment »

O JAPÃO DEIXOU O BRASIL A VER NAVIOS

Posted by Gilmour Poincaree on December 1, 2008

01/12/2008 14:36

PUBLISHED BY ‘BLOG OF ZÉ DIRCEU’ (Brasil)

José Dirceupor José Dirceu

A TV digital completa, amanhã, um ano de funcionamento no Brasil. Nesse um ano seu sinal só chegou, por enquanto, a cinco capitais, mas a promessa é de que até 2016, dentro de mais 8 anos, portanto, estará em todo o Brasil.

Há um ano, em meio a muitas pressões, acirrada disputa de americanos, europeus e asiáticos e intensa polêmica que cercava a opção que o Brasil faria, o país escolheu o padrão japonês, mediante a solene promessa dos vencedores de que instalariam aqui uma fábrica de semicondutores que, além de suprir o mercado, absorveria mão de obra de forma intensiva, tanto direta, quanto pela cadeia de produção de componentes.

Agora, passado um ano, é o caso de se repetir uma expressão comum no interior brasileiro, a que “perguntar não ofende”, e fazer a clássica e elementar indagação: cadê a fábrica de semicondutores que os japoneses iam implantar no Brasil, parte do pacote acertado com eles pelo país ter optado pelo padrão japonês?

Nada, até agora nenhum tijolo, nenhum bloco de pré-molddado da prometida fábrica. Pelo contrário, os japoneses já anunciaram oficialmente que não a implantarão aqui. Como ficamos? Nenhuma cobrança, nenhuma providência vai ser adotada?

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PUBLISHED BY ‘BLOG OF ZÉ DIRCEU’ (Brasil)

Posted in A INDÚSTRIA DA COMUNICAÇÃO, BRASIL, CIDADANIA, COMÉRCIO - BRASIL, DEFESA DO CONSUMIDOR - BRASIL, ECONOMIA - BRASIL, INDÚSTRIA DE ELETRO-ELETRÔNICOS, INDÚSTRIAS, INTERNATIONAL, JAPAN, MINISTÉRIO DAS COMUNICAÇÕES, O MERCADO IMPORTADOR, O PODER EXECUTIVO FEDERAL, OS MEIOS DE COMUNICAÇÃO - BRASIL, POLÍTICA EXTERNA - BRASIL, RELAÇÕES COMERCIAIS INTERNACIONAIS - BRASIL, RELAÇÕES DIPLOMÁTICAS - BRASIL, RELAÇÕES INTERNACIONAIS - BRASIL | Leave a Comment »

SUZUKI CORTARÁ 1,2 MIL POSTOS DE TRABALHO NA HUNGRIA – Produção diária será reduzida a partir de dezembro

Posted by Gilmour Poincaree on November 30, 2008

29/11/2008 – 06h57min

PUBLISHED BY ‘ZERO HORA’ (Brasil)

A japonesa Suzuki Motor anunciou que no final de fevereiro cortará 1,2 mil empregos em sua fábrica da Hungria por causa da diminuição da demanda na Europa, segundo informou a agência local Kyodo.

Os postos de trabalho na fábrica húngara se reduzirão dos 5,6 mil atuais para 4,4 mil.

A partir de meados de dezembro, o fabricante japonês diminuirá a produção diária até produzir um total de 210 mil unidades anuais, ou seja, menos 90 mil veículos ao ano.

Em outubro, a companhia anunciou uma redução de sua previsão de lucro para o presente ano fiscal, que concluirá em março de 2009, em um 25,2%, para 60 bilhões de ienes (US$ 629 milhões).

EFE

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PUBLISHED BY ‘ZERO HORA’ (Brasil)

Posted in AUTOMOTIVE INDUSTRY, BANKING SYSTEMS, ECONOMIC CONJUNCTURE, ECONOMY, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, HUNGARY, INDUSTRIAL PRODUCTION, INDUSTRIES, INTERNATIONAL, JAPAN, NATIONAL WORK FORCES, OUTSOURCING INDUSTRIES, RECESSION, THE FLOW OF INVESTMENTS, THE WORK MARKET, THE WORKERS | 1 Comment »

UNCERTAINTIES BEDEVIL PLANS TO KEEP WORLD TRADE FLOWING

Posted by Gilmour Poincaree on November 29, 2008

28/11/2008 1:00:00 AM

PUBLISHED BY ‘THE CANBERRA TIMES’ (Australia)

Trading nations around the world are saying the right things about preventing a surge of protectionism that would choke Pakistani investors monitor the index at Karachi Stock Exchangeglobal trade when it needs to be boosted to help pull economies out of their slump. But amid fears of a deepening recession stretching beyond 2009, will governments act in conformity with their promises?

Leaders of the 21 economies in APEC, the Asia Pacific Economic Cooperation forum, hit the right notes when they issued a statement during their summit in Lima, Peru, last weekend. To counter calls to shield countries and industries from competition by restricting imports, the APEC leaders, who oversee half the world’s economic activity, said that in the next 12 months they would not raise new barriers to investment or to trade in goods and services, impose new export restrictions, or implement measures inconsistent with the World Trade Organisation, including those that stimulate exports.

This was an endorsement of the free trade section of a declaration issued by the summit of the Group of 20 advanced and emerging economies in Washington on November 15. The G20 accounts for about 90 per cent of global economic activity and 80 per cent of trade. Australia, Canada, China, Indonesia, Japan, Mexico, Russia, South Korea and the US are members of both APEC and the G20. So the combined words of leaders of these two groups should carry weight.

Yet two days after Russia’s President, Dmitry Medvedev, put his name to the G20 declaration, his Deputy Finance Minister, Dmitry Pankin, announced that Moscow would raise tariffs on imported cars to protect Russian producers.

Russia has also announced a general review of trade agreements that may lead to a further increase in import duties and a cut in quotas for allowable imports. Russia says these measures were planned in advance of the G20 meeting. ”No one said that anyone should scrap existing barriers or go back on existing decisions,” Mr Pankin explained.

China, which is anxious to help exporters hit by falling demand in the US and Europe, took a somewhat different tack. Three days before the G20 summit it raised export tax rebates paid on more than 3700 types of goods almost 28 per cent of the total sold overseas. Yet China has a huge trade surplus and has been criticised by economists who argue that the export sector receives too much favorable treatment from the government, which should instead stimulate domestic demand.

So far there has been no reneging on APEC and G20 free trade pledges. But these are early days. It will take resolute national leadership and continuing international consultation to resist protectionism as economic woes get worse and cries for help by affected industries become louder.

Fredrik Erixon, director of the European Centre for International Political Economy, a free-trade think-tank in Brussels, is concerned that the APEC and G20 pledges still leave scope for countries to impose anti-dumping duties on imports deemed to be below the cost of production, and to provide emergency state aid to politically sensitive industries. Indeed, he says that such measures are supplanting permanent import tariffs as the main method of protectionism and were not covered by either the APEC or G20 statements.

Still, APEC went somewhat further than the G20 in supporting an early resumption of WTO negotiations to liberalise international trade. These negotiations collapsed last July after seven years because of disagreements between the US and India, backed by China, over the extent to which agriculture in developing countries should be shielded from foreign competition.

China’s President Hu Jintao said in Lima that Beijing believed reviving the WTO talks and bringing them to a successful conclusion should be a top priority. APEC leaders directed their trade ministers to meet in Geneva next month to try to advance the WTO negotiations. Prime Minister Kevin Rudd said a successful outcome would be a ”huge shot in the arm for the global economy” and to confidence.

If the world trade deal stalls again, there is another option for Pacific Rim nations. They could forge a trans-Pacific free trade agreement. The Bush Administration in the US, Australia and Peru announced recently that they would join Brunei, China, New Zealand and Singapore in talks to try to build the core of a free trade area of the Asia-Pacific. The first round of negotiations will be held in March in Singapore.

However, the Obama factor is looming over all these issues. Barack Obama, the US President-elect who takes office in January, outlined a potentially protectionist agenda during the election campaign. He said he would renegotiate the North American Free Trade Agreement with Canada and Mexico and a pending bilateral deal with South Korea, rebalance economic ties with China to reduce the huge US trade deficit, challenge unfair trade in the WTO and elsewhere, and discourage US companies from outsourcing work to countries such as India and the Philippines.

If Obama, backed by a Democratic majority in Congress, takes up these cudgels, the prospects of success in both the WTO and trans-Pacific trade liberalisation negotiations will recede while the likelihood of a slide into wider tit-for-tat protectionism will increase.

The International Chamber of Commerce pointed out recently that parallels are being drawn between the financial and economic crisis of today and the Great Depression of the 1930s. ”Almost 80 years ago, many nations reacted to the Great Depression by raising border tariffs and ended up making matters worse for themselves included. Beggar-my-neighbour protectionism ended up beggaring everyone. That is one of the most unambiguous lessons of the 1930s,” the chamber said.

Obama and the leaders of other major economies and trading nations should bear this in mind as they consider policies for 2009 and beyond.

The writer, a former Asia editor of the International Herald Tribune, is a visiting senior research fellow at the Institute of South-East Asian Studies in Singapore.

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Posted in AGRICULTURE, AUSTRALIA, BANKING SYSTEMS, CANADA, CENTRAL BANKS, CHINA, COMMERCE, COMMODITIES MARKET, ECONOMIC CONJUNCTURE, ECONOMY, FINANCIAL MARKETS, G20, INDONESIA, INTERNATIONAL, JAPAN, MEXICO, PERU, RECESSION, REGULATIONS AND BUSINESS TRANSPARENCY, RUSSIA, STOCK MARKETS, THE FLOW OF INVESTMENTS, USA, WORLD TRADE ORGANIZATION | Leave a Comment »

OCDE ESPERA RECESSÃO PARA EUA E EUROPA EM 2009

Posted by Gilmour Poincaree on November 25, 2008

Plantão – Publicada em 25/11/2008 às 13h01m

por Juliana Cardoso – Valor Online

SÃO PAULO – A Organização para a Cooperação e Desenvolvimento Econômico (OCDE) espera recessão em vários países no próximo ano, como Estados Unidos e Japão. Acredita que a desaceleração econômica deverá ser mais severa em economias mais vulneráveis a crises financeiras ou às fortes quedas de preços das casas, como Hungria, Islândia, Irlanda, Luxemburgo, Turquia e Reino Unido. Também avalia que o desaquecimento global afetará as principais economias emergentes, como Brasil, China, Rússia e Índia, mas o efeito será mais limitado.

Nos Estados Unidos, conforme o relatório da OCDE, o Produto Interno Bruto (PIB) deve declinar 0,9% em 2009 antes de apresentar crescimento de 1,6% em 2010. Na zona do euro, o PIB deve ter contração de 0,6% no próximo calendário e expandir-se 1,2% um ano depois. A economia japonesa declinará 0,1% em 2009, mas deverá registrar avanço de 0,6% em 2010.

No levantamento Perspectivas Econômicas, a organização prevê que o números de desempregados nos países pertencentes à OCDE deve crescer em cerca de 8 milhões de pessoas nos próximos dois anos uma vez que a recessão mais séria desde o início dos anos de 1980 afeta a atividade econômica.

O contingente de desempregados pode alcançar 42 milhões de pessoas em 2010 em comparação aos 34 milhões registrados atualmente. A atividade econômica nos integrantes da OCDE deve ceder 0,4% em média em 2009 antes de crescer 1,5% no ano seguinte.

“As incertezas envolvendo as projeções são excepcionalmente altas”, declarou o economista-chefe da OCDE, Klaus Schmidt-Hebbel. “Muito depende de de como ocorrerá a superação da crise financeira, o principal motor da desaceleração”, acrescentou.

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Posted in BANKING SYSTEMS, BRASIL, CHINA, ECONOMIC CONJUNCTURE, ECONOMY, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, HUNGARY, ICELAND, INDIA, INTERNATIONAL, IRELAND, JAPAN, LUXEMBOURG, ORGANIZATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT (OECD), RECESSION, RUSSIA, THE FLOW OF INVESTMENTS, THE WORK MARKET, TURKEY, UNITED KINGDOM, USA | Leave a Comment »

CHINA PASSA JAPÃO COMO MAIOR CREDOR DOS ESTADOS UNIDOS

Posted by Gilmour Poincaree on November 19, 2008

Publicação: 19/11/2008 08:53

FolhaNews

USA AND CHINA TALK MONEY

Em meio a sua pior crise financeira em décadas, os EUA vêem uma troca de guarda na posição de seus principais credores individuais. Segundo o relatório mais recente do governo, de setembro, a China passou o Japão como maior detentor de papéis do Tesouro americano, numa ascendente que começou seis meses atrás.

Agora, a China detém US$ 585 bilhões em “treasuries”, como são chamados os títulos da dívida pública dos EUA, ante US$ 573,2 bilhões do Japão, que mais vendeu do que comprou os papéis em quatro dos últimos seis meses. No total, estrangeiros detêm US$ 2,86 trilhões de títulos do governo americano, ou o dobro do PIB brasileiro.

A notícia é agridoce para os EUA. Por um lado, o país vê reafirmada a confiança dos mercados mundiais e a crença de que o governo terá condições de honrar seus compromissos.

Por outro, vê sair do topo da lista de credores seu principal aliado na Ásia para dar lugar a seu maior competidor comercial mundial. A política de compra dos títulos pela China é agressiva: o país dobrou o valor investido desde julho de 2005.

Brasil em 4°

Já o Brasil continua em quarto lugar, posição que ocupa há mais de um ano. Mas diminuiu sua exposição, passando de US$ 146,2 bilhões em agosto para US$ 141,9 bilhões em setembro. À frente do país, além de China e Japão, estão Reino Unido e dois agrupamentos, de exportadores de petróleo, formado por 15 países, e dos paraísos fiscais do Caribe, formado por seis países.

A diferença entre compra e venda de papéis foi de US$ 66,2 bilhões em setembro, mês em que as Bolsas tiveram grandes perdas -reflexo do estopim da atual fase da crise financeira, detonada pela decisão do governo dos EUA de não socorrer o banco de investimentos Lehman Brothers, que quebrou.

O Tesouro informou ainda que investidores estrangeiros compraram US$ 143,4 bilhões em ativos americanos em setembro, a maior entrada de capital em quase três anos.

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PUBLISHED BY ‘CORREIO BRAZILIENSE’ (DF – Brasil)

Posted in CHINA, DOLLAR (USA), ECONOMIC CONJUNCTURE, ECONOMY, FINANCIAL CRISIS - USA - 2008/2009, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, FOREIGN POLICIES - USA, INTERNATIONAL, INTERNATIONAL RELATIONS, JAPAN, NATIONAL DEBT - USA, THE FLOW OF INVESTMENTS, USA, YEN (Japan), YUAM RENMIMBI (China) | Leave a Comment »

EFECTOS DE LA CRISIS FINANCIERA – Japón entró ya en recesión económica

Posted by Gilmour Poincaree on November 18, 2008

17/11/2008

TOKIO, 17 de noviembre.— Considerada como la segunda economía mundial más fuerte, Japón entró Japón entró ya en recesión económica - noviembre de 2008hoy oficialmente en recesión, una semana después de que los 15 países de la Eurozona entraran por igual camino, influenciados por la crisis financiera de Estados Unidos.

Un comunicado de prensa del Ministerio de Finanzas indica que la economía nacional se contrajo, por segunda ocasión, en un 0,1% en el tercer trimestre, señala PL.

“Esta no será una recesión corta o indolora”, advirtió Noriko Hama, economista y profesor de la universidad Doshisha.

Con las economías de Francia y Gran Bretaña también en rápida desaceleración, el presidente de la Comisión Europea, José Manuel Durao Barroso, llamó a adoptar un plan de estímulo fiscal a nivel europeo.

Los inversionistas de Asia y Europa no se mostraban muy impresionados con la nueva ola de promesas efectuada el sábado por los líderes del grupo de países más industrializados y los emergentes para unir fuerzas a fin de estimular el crecimiento y reformar la arquitectura financiera mundial.

Entretanto, Reuters reporta desde Londres que las acciones europeas cayeron hoy, entre otros factores, por los crecientes temores a una recesión, los planes del banco Citigroup de eliminar 50 000 empleos y un retroceso de los precios de los metales.

Al mismo tiempo se dio a conocer que la zona euro acumuló un déficit comercial, en septiembre, de 5 600 millones de euros, frente al superávit de 2 900 millones en igual periodo del 2007, difundió la Eurostat.

Sin embargo, acota PL, economistas encuestados esperaban un desbalance de 7 300 millones de dólares para el noveno mes del 2008, muy por encima de lo registrado.

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Posted in ECONOMIC CONJUNCTURE, ECONOMY, FINANCIAL CRISIS 2008/2009, INTERNATIONAL, JAPAN, RECESSION, THE EUROPEAN UNION, YEN (Japan) | Leave a Comment »

ZAIBATSU GLOBALIZATION ‘VOODOO ECONOMICS’ BOWING OUT

Posted by Gilmour Poincaree on November 18, 2008

Friday, November 14, 2008

ERLE FRAYNE ARGONZA Y DELAGO by Bro. Erle Frayne Argonza

Magandang hapon! Good afternoon!

Let me share to you at this moment some notes regarding the ‘globalization’ experiment and the flawed policies that sustained it. There has been much ballyhoo about the global economy’s integration, over the last three (3) decades, as having been carved out supposedly by the Anglo-Saxon policy architects, using Thatcher & Reagan as the face for the ‘neo-liberal’ policy regime they installed.

Little do peoples across the globe, including experts who are so mired in their own parochial perspectives, know that the liberalization of country economies has a great deal to do with the Zaibatsu offensive. The West should better accept the facts: that their technocrats and policy shapers have run out of fresh ideas since the 1970s onwards (i.e. mentally bankrupt), a gap that they filled up by looking up to Japan and the NICs (newly industrializing countries) for copycat purposes.

Reaganomics, as neo-liberal policies of ‘privatization’ was dubbed (Thatcher of the UK preceded Reagan by a year), is as voodoo as one can get, seductive as any enchanting mantra-resonating principle can be, and was indeed potent in erasing the vestiges of the Regulated Economics doctrines that preceded the era. In the emerging markets, they were dubbed as ‘structural adjustment policies’ or SAPs, were imposed by the IMF-World Bank Group on debtor nations, and can be summed up as follows:

· Core principles: Privatization, Liberalization, Deregulation

· Subsidiary Principles: Tax reforms, trade liberalization, free floating exchange rates, diminished state subsidies for welfare, increased utility prices (revenue generation)

· Governance Principle: Decentralization (local government autonomy)

Such policy reform measures, as far as developing countries or DCs were concerned, came in as very harsh, cruel ‘austerity measures’ imposed by the IMF. We citizens from the ‘margins’ can never forget these measures, the pauperization that they effected, the dislocation of marginal producers, the decline of health services and rise of morbidity rates, and so on. In the Philippines, our very own capital goods industries were either delayed or un-implementable (such as integrated steel), as the money allocated for their purposes simply dried as dictated by the World Bank.

But there’s another set of policy architecture that wasn’t Anglo-Saxon, and didn’t receive their inspiration from the classicists (Smith, Ricardo) and the monetarists (Friedman, Hayek). This set of liberalization policies came from Zaibatsu country, and were crafted by Japanese technocrats. Not only policies, but also institutions were addressed by them, giving rise to the globalized economy that we have today.

Chief among those technocrats was Kenichi Ohmae, who in the 1980s was a think-tank executive. Further down the line were many other technocrats, who were organically linked to the Zaibatsus (landlord-industrialist-financier oligarchs), taking up cudgels for Ohmae.

Globalization, as one better realize, was never meant as any ‘win/win’ formula for nation-states in the arena of international trade as the liberal thinkers came to defend it later. It was outright a strategy to pre-position Zaibatsu corporate interests outside of Japan, notably the U.S. and European markets.

At that time of conceptualization, Zaibatsus have already efficaciously penetrated the Asian markets, and had leveraged their investments’ entry via aid and technical knowledge diffusion (including sponsoring Developing Country scholars in Japanese universities & special institutes). The old doctrine of ‘Asia Co-prosperity sphere’ was finally won, without firing a shot this time (unlike Imperial Japan era expansionism).

In the 1980s, the clamor for mooring investments and trade in the Western markets became ever stronger. The offensive tactic adapted was rather two-pronged, which made the new voodoo mantra even more potent:

· On the micro-level, permeate other markets with new concepts such as ‘Theory Z’ (decentralized authority, see W. Ouichi), total quality management or TQM, new tools for strategic planning, mergers and de-mergers. Till these days, the tools are considered sacrosanct in all sectors of society, including the Catholic Church that now uses ‘bottom-up’ planning added to strategic planning (my observations done in 2001-02 in a California diocese).

· On the macro-level, blend the Reagan-Thatcher ‘structural adjustments’ with the ‘globalization’ doctrine. The Zaibatsu technocrats fanned out across the globe, some of whom were positioned inside international bodies, and sweetened liberalization via a supposedly ‘win/win’ growth strategy for participating countries. This brilliant blending, which Western thinkers didn’t perceive at all as any subtle tactic by a predatory class (Zaibatsu), soon caught up fire and became buzz word for nigh three decades.

Before long, the Japan Inc. was being bandied across the globe as worth any country’s emulation. Southeast Asia and Korea went for it. Even the former presidents of the USA admired the Japanese Inc. doctrine of renewed private initiatives and shift from macro- to micro-economics as stabilization and growth measure. Bill Clinton of the USA spoke so fondly of ‘globalization’ like some captive fan of an economic icon, and moved to negotiate the NAFTA.

Little do unsuspecting, gullible peoples across the planet, more so the policy experts of the West, realize that the Japanese voodoo economics was largely intended to permit Zaibatsu investments to breed and morph inside their economies. Using merger and buy-in tactics, the Zaibatsu agents made it appear that their sponsors came in for benign purposes or so. If there is any group in the world today that is enjoying its last laugh, it is the Japanese militarists of the past, who finally saw the success of their nation’s offensives and the decline of the West via ‘organized chaos’.

Around 1994, the magic of the Japan Inc. began to cramble. Recession came, and before long many banks and investment houses were catching fire. That was the origin of the bankrupt and immoral Bush-Paulson ‘bailout’, which began with the ‘crisis management’ tactic in Japan to save ailing banks and financial institutions. Eventually, Zaibatsu technocrats were forced to revive the Western tool of ‘interest rates’ intervention, to the extent of bringing down interest rates to zero percent and sustaining it there for many years.

There also came that moment, in the late 1990s through 2006, when Zaibatsu financiers suddenly were so awash with funds (liquidities), at a time when Western economies reached low growths. The ‘yen initiative’ package was therefore conceptualized as another last-ditch voodoo tactic, which was implemented by loaning out large funds at zero or low interest, which Western financiers than re-loaned at profitable interest rates. Many such funds reached the USA& EU realty subprime mortgage markets, to recall. Again, note the seemingly benign nature of the financial gesture.

Just as when the realty markets were beginning to sneeze in America, the last voodoo measure was pulled out. The ‘crisis management’ was already folded up earlier, as Japan’s economic growth was propelled up anew by the Asian markets notably China’s. Just as when USA & EU needed the Zaibatsu loans very badly, and ditto for portfolio investments, they were pulled out, thus ensuring the crash of both economies.

Japananese voodoo economics is now bowing out, as the compass of policy initiatives at present is pointing to the reconstruction of macro-economic, New Deal type measures intended to attack problems both on short-term (bail out on productive sectors) and long-term basis (induce physical economy rather than predatory finance). But the withdrawal of the voodoo regime is not being done without witnessing its catastrophic results.

That’s surely tragic for the West or North. I wonder how Zaibatsus & technocrats perceive peoples outside their borders: whether they regard the latter as human beings worth co-partnering with, or as hungry lizards that must subsist on crumbs of investments & finance from Japan that have been buttressed by enormous tons of gold acquired through production and plunder of occupied lands, across the 2,000 years of Japan’s existence from kingdom to nation.

Honestly, I don’t know the answer. But if the Zaibatsus are receiving flaks from outside their borders, it wouldn’t be a surprise. There are no more borders for Zaibatsus by the way, just an entire planet with seamless web, cocooned in all corners by their corporate money.

[Writ 14 November 2008, Quezon City, MetroManila]

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Posted in BANKING SYSTEMS, COMMERCE, ECONOMIC CONJUNCTURE, ECONOMY, FINANCIAL MARKETS, FOREIGN POLICIES, INTERNATIONAL, INTERNATIONAL RELATIONS, JAPAN, MACROECONOMY, REGULATIONS AND BUSINESS TRANSPARENCY, THE FLOW OF INVESTMENTS | Leave a Comment »

ASO WANTS BANKS TO COME CLEAN ON NON-PERFORMING LOANS (Japan)

Posted by Gilmour Poincaree on November 17, 2008

Published: November 15, 2008, 23:41

AP

Washington: Japanese Prime Minister Taro Aso believes world leaders gathering this weekend to Newly elected Liberal Democratic Party President Taro Aso speaks during a press conference at the party headquarters in Tokyo, Japanconfront global economic turmoil can learn valuable lessons from Japan’s efforts to recover from its own financial crisis in the 1990s, a spokesman said.

During that decade, the world’s second-largest economy was strongly criticised for doing too little to improve its banking sector’s health after a stock and real estate bubble burst.

Aso’s message at the summit is that banks must quickly and fully disclose their non-performing loans and remove them from their balancesheets, spokesman Kazuo Kodama told reporters on Friday.

Soul-searching

Leaders have “no luxury to engage in blame games”, Kodama said, but they should engage in “candid soul-searching on why this happened”. Aso, who planned meetings with the leaders of Brazil, Britain, Indonesia, Australia and the European Union, came to this weekend’s gathering of 20 of the world’s biggest developed and developing economies after announcing that Japan was ready to lend up to $100 billion (Dh367.8 billion) to the International Monetary Fund (IMF) to support nations reeling from the global financial crisis.

Kodama said Aso hopes China and countries in the Middle East also will contribute.

He said the IMF and World Bank’s governance structures should be reviewed to reflect better the world economic structure’s changing nature.

Japan has almost $1 trillion in foreign currency reserves, and officials in Tokyo have repeatedly said Japan was ready to provide the IMF with money for rescue packages. The Washington-based IMF has dipped into its reserves to provide emergency loans to Iceland, Hungary and Ukraine worth more than $30 billion.

Financial recovery efforts in Japan have contributed to an environment of more profitable lending; many banks have merged to face global competition, after years of writing off mountains of non-performing loans that piled up after the bubble burst in the early 1990s.

Kodama, in outlining Aso’s position on the economic crisis, said that providing public funds for banks also would help resolve the problem of non-performing loans. He said: “The world should also be making efforts to support the dollar-based currency system, on which the current international economic and financial systems rely.”

Meanwhile, the finance ministers of China, South Korea and Japan also met on Friday evening and agreed that their countries “should play a pivotal role in maintaining economic and financial stability in the region,” according to a joint statement.

They recognised the need to boost financial cooperation and agreed to explore an “increase in the size of bilateral currency swap arrangements” among the countries.

Top finance officials from the countries will hold a financial stability workshop in Tokyo on November 26.

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Posted in BANKING SYSTEMS, CENTRAL BANKS, ECONOMIC CONJUNCTURE, ECONOMY, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, G20, IMF, INTERNATIONAL, INTERNATIONAL RELATIONS, JAPAN, REGULATIONS AND BUSINESS TRANSPARENCY, THE FLOW OF INVESTMENTS | Leave a Comment »

CHINA SAYS IT MIGHT WORK WITH IMF ON GLOBAL CRISIS

Posted by Gilmour Poincaree on November 15, 2008

Published: Nov 14, 2008 12:31 AM – Modified: Nov 14, 2008 04:52 AM

by Joe McDonald – AP Business Writer

BEIJING – China said Friday it could work with the International Monetary Fund to help countries hurt by the global financial crisis, suggesting it might heed appeals to contribute to a bailout fund.

As President Hu Jintao prepared for a Washington meeting of leaders to discuss a response to the crisis, Vice Finance Minister Yi Gang sounded constructive, saying China was prepared to work with other countries. But at the same time, Yi reiterated that the most important step Beijing can take will be to keep its own economy stable.

“We are positively taking part in rescue actions for this international financial crisis,” Yi said at a news conference. “There are many ways to do this. We can do it bilaterally, such as currency swaps. And we can do it multilaterally, such as taking part in activities on the platform of the IMF.”

Hu is expected to come under pressure at the weekend meeting to use China’s $2 trillion in reserves to help expand an IMF stability fund. Beijing has yet to respond directly to such suggestions but says Hu will press Western leaders to give developing countries a bigger role in such global financial institutions, a measure that analysts say might be a condition for a Chinese contribution.

Japanese Prime Minister Taro Aso said Friday that Japan is ready to lend up to $100 billion to the IMF to support nations reeling from the global financial crisis. The IMF has dipped into its reserves fund to provide emergency loans to Iceland, Hungary and Ukraine worth more than $30 billion.

Yi repeated Beijing’s insistence that keeping its economy growing will be an important contribution to global stability. China announced a nearly $600 billion package on Sunday to boost economic growth through higher spending on construction and social programs.

“We have worked to stabilize the growth of China’s economy. We believe this will be our biggest contribution to the international response to the financial crisis,” Yi said.

Also Friday, another official said weakness in China’s economy is worsening and the government faces a severe challenge as it tries to avert a sharp downturn.

“The downturn trend in our economy is more obvious, especially since September. We hope a rapid downturn in growth will not occur,” Mu Hong, a deputy chairman of the nation’s main planning agency, said at the news conference with Yi.

Mu expressed confidence the stimulus package would help the country weather the global downturn. But he said, “This international financial crisis is a new challenge for us. It is a severe challenge.”

Beijing is moving quickly to launch the package and will distribute most of a planned 100 billion yuan ($15 billion) in additional government spending within the next two weeks, Mu said. He said the money will be spent on housing, rural development, highways, public health and environmental protection.

The government says the total stimulus – which also calls for higher investment by state companies – will be worth 4 trillion yuan ($586 billion) over the next two years.

China’s economic growth fell to 9 percent in the latest quarter after a stunning 11.9 percent expansion last year. Exporters say foreign customers are canceling orders, which has led to layoffs and factory closures.

Mu blamed the weakness on the global downturn. But data released Friday showed domestic investment – a key force driving China’s rapid expansion – is also cooling as companies cut back or put off spending on real estate, factories and other assets.

Investment in assets grew by 27.2 percent in the first 10 months of this year over the same period of 2007, the National Bureau of Statistics reported. That was down from the 27.6 percent growth reported for the first nine months of the year. Such investment is estimated to account for one-third of China’s economic growth.

“China’s pace of economic growth will reflect the extent to which accelerated infrastructure spending will be able to offset a slowdown in the property and manufacturing sectors,” said a report by Jing Ulrich, JP Morgan Chase & Co.’s chairwoman for China equities.

“Further fiscal and monetary easing may be called for as growth moderates,” Ulrich said.

© Copyright 2008, The News & Observer Publishing Company

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DOCOMO TO BUY STAKE IN TATA TELESERVICES – Japanese operator to get foothold in India

Posted by Gilmour Poincaree on November 14, 2008

Posted to the web on: 13 November 2008

by Sachi Izumi and Devidutta Tripathy

Reuters

TOKYO — NTT DoCoMo will pay $2,7bn for a 26% stake in Indian telecom Tata Teleservices, giving TATA TELESERVICESJapan’s top cellphone operator a foothold in the world’s fastest-growing major cellphone market.

DoCoMo’s deal with Tata Teleservices follows a $350m investment in Bangladesh’s third-largest cellphone carrier as it speeds up its expansion beyond a mature home market and adds to the record $63bn of overseas acquisitions by Japanese firms this year.

But as DoCoMo expands, salt-to-software conglomerate Tata Group — the parent of unlisted Tata Teleservices and the flagbearer for corporate India’s recent overseas expansion — has put its plans for acquisitions on hold due to the global credit crisis.

DoCoMo will also make an open joint-tender offer with Tata Sons, the holding firm of the group, to buy NTT DoCoMo up to 20% in a listed unit of India’s sixth-biggest cellphone operator, as required by Indian law.

DoCoMo was committed to the management of Tata Teleservices and saw it as a long-term investment, president Ryuji Yamada said in Tokyo.

Ahead of the announcement, shares in the unit, Tata Teleservices (Maharashtra), closed up 7,6% in a Mumbai market that fell 3,1%, while shares in DoCoMo ended up 1,3% in a Tokyo market down more than 1%.

DoCoMo did not rule out the possibility of taking a majority stake in Tata Tele in the future.

Shinji Moriyuki, a telecoms analyst at Mitsubishi UFJ Securities, said DoCoMo’s recent acquisitions in Asia would be positive, especially with the company’s extensive knowledge of third-generation (3G) network services to which many developing countries are now moving.

India is the world’s second-biggest mobile market, trailing only China. More than 10-million users signed up in September, taking the total customer base to 315,3-million, more than the population of the US, and almost three times the size of Japan’s market of 109-million subscribers.

Researcher Gartner forecasts India’s cellphone user base will more than double to 737-million by 2012, as just more than a quarter of India’s 1,1-billion population own cellphones compared with about 85% in Japan.

DoCoMo will face tough competition, though, as foreign firms such as Telenor, Etisalat and Sistema are gearing up to start services in India, where home-grown Bharti Airtel and Reliance Communications dominate along with a Vodafone unit.

Carriers in India at the moment provide only 2G services. A global auction of radio waves for 3G and 4G wireless services, which provide more advanced mobile services including video, is due in January.

The DoCoMo deal comes a day after Japanese chemical maker Mitsubishi Rayon announced a $1,6bn acquisition of British rival Lucite International. Earlier this year, drug maker Daiichi Sankyo forged a $4,6bn deal for a controlling stake in India’s Ranbaxy.

DoCoMo spent nearly ¥1,9-trillion in the late 1990s and early 2000s on small stakes in operators around the world to promote use of its i-mode mobile internet technology and ensure the adoption of 3G networks on the same wideband code division multiple access standard it uses. But it saw its investments sour, and pulled out of AT&T Wireless Services , Dutch operator KPN Mobile and Hutchison 3G UK Holdings after incurring heavy losses.

The Tata Group, which splashed out an Indian record of $13bn for steel maker Corus last year and this year bought Jaguar and Land Rover for $2,3bn, has put further acquisitions on hold due to the credit crunch.

“Some of our companies with substantial foreign operations, or those which have made substantial acquisitions, are facing major problems in raising capital and establishing lines of credit for their operations,” chairman Ratan Tata said .

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JAPAN PM UNVEILS ANTI-CRISIS STEPS AHEAD OF SUMMIT

Posted by Gilmour Poincaree on November 14, 2008

14 Nov 2008, 09:43 hrs IST

REUTERS

WASHINGTON: Japan proposed a raft of steps on Thursday to help overcome the global financial crisis and avoid a future meltdown, including offering to boost the IMF’s firepower and calling for tougher supervision of credit rating agencies.

In a position paper released ahead of a leaders’ summit of the Group of 20 industrialised and emerging nations in Washington, Prime Minister Taro Aso said Tokyo would continue to support the dollar-based currency system despite market concerns about its outlook as U.S. economic power declines.

Japan, which holds the world’s second-largest foreign reserves at $980 billion, would be ready to lend up to $100 billion to the International Monetary Fund (IMF) to assist emerging economies if the Washington-based lender finds itself with insufficient funds, he said.

Behind the prime minister’s comments is a view in Tokyo that Japan had to learn its lesson the hard way from its prolonged response to tackling its own financial crisis in the 1990s.

He said other nations should also consider clarifying management responsibility when injecting public funds into banks, and adopt fair valuation and early disclosure of non-performing loans.

“At present, capital flows have become so global that they can occur instantaneously to take advantage of any differences that may exist among the regulations of various countries,” he said. “Concerted action to help converge each country’s various policy efforts to prevent a recurrence of the financial crisis is now an unavoidable challenge.”

On the role of the IMF, he somewhat distanced himself from some European views that the Washington-based lender should be entrusted with primary responsibility over financial regulation.

Instead, he said the Financial Stability Forum (FSF) should be given a clear status above standard-setting international organisations such as the Basel Committee, adding that the forum’s work with the IMF should be reinforced.

He said more emerging nations should belong to the FSF, whose members include international bodies and the Group of Seven nations plus Australia, Hong Kong, the Netherlands, Singapore and Switzerland.

In a proposal that may not sit well with the U.S. free-market focus, he said there should be discussions on providing legal authority to government officials over rules on credit rating agencies. He also called for fostering local credit rating agencies, such as in Asia, and to further develop a regional scheme to help provide dollar funding as in Asia’s web of currency swap agreements called the Chiang Mai Initiative. But he stressed that “open regionalism complements globalism in a positive sense.”

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ASIAN SHARES, OIL TUMBLE AS GLOBAL RECESSION FEARS MOUNT

Posted by Gilmour Poincaree on November 13, 2008

November 13, 2008

by Rafael Nam

HONG KONG, Nov. 13 (Reuters) – Asian shares fell on Thursday to their lowest this month on A woman walks by an electric stock average index board in Hong Kong Thursday, Nov. 13, 2008. Hong Kong's stock index has plunged over 6 percent in early trade, tracking Wall Street's sharp losses overnight. The blue chip Hang Seng index fell 923.83 points, or 6.63 percent, to 13015.28 points in the morninguncertainty about whether the United States can succeed in its massive banking rescue and as Intel Corp.’s revenue warning stoked corporate earnings worries.

European markets also opened lower and were set for another rocky ride as the Germany announced its economy officially entered recession, contracting for a second straight quarter.

Japan’s Nikkei average dropped 6.3 percent. Other markets also took a beating: South Korea, Australia, and Hong Kong fell 5-6 percent each. Taiwan and Singapore dropped 3-4 percent each.

However, Shanghai gained 1.7 percent on hopes China’s spending plan would spur economic growth.

Evaporating confidence in the global economy led crude prices to hit a 22-month low of $ 55 a barrel, even after OPEC President Chakib Khelil indicated the oil-producing cartel may cut supply again. Metals such as platinum also dropped.

In London, oil prices steadied on Thursday after falling close to 50 dollars a barrel as the International Energy Agency warns of sliding energy demand around the globe.

With prices tumbling to the lowest levels in almost two years and down almost two-thirds in value compared to record highs of above 147 dollars a barrel in July, analysts said OPEC was certain to call an emergency meeting to announce further cuts to output.

Adding to the gloom was the forecast of the Organization for Economic Cooperation and Development that leading industrialized nations appear to be in a ‘’protracted’’ downturn, with the US, Japanese and eurozone economies likely to shrink next year.

The OECD predicted a return to modest growth in 2010 but warned that the United States, the world’s largest economy, would suffer a whopping 2.8 percent contraction in fourth quarter 2008.

It called for further government stimulus measures and steps to shore up financial markets but also warned against any move that would distort competition or threaten the operation of open markets.

The Japanese yen retreated against the euro and the dollar after soaring on Wednesday on a flight-to-quality. Other Asian currencies fell, while Australia’s central bank stepped in to support its tumbling Australian dollar.

The MSCI index of Asian stocks outside Japan dropped 5.7 percent after at one point hitting its lowest level since Oct. 30.

Asian shares followed Wall Street lower after the US Treasury on Wednesday backed away from using a $ 700 billion bailout fund to buy bad mortgage debt from lenders to focus instead on buying stakes in the US banks themselves.

The shift in focus not only created uncertainty, but came after a raft of recent gloomy economic data worldwide.

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RISKS WEIGH ON SPREADS AS US RESCUE PLAN SHIFTS (Singapore)

Posted by Gilmour Poincaree on November 13, 2008

Posted to the web on: 13 November 2008

Reuters

SINGAPORE — Market disappointment with the US Treasury’s proposed shift in the use of its bailout funds spilled over into Asian money markets today, freezing spreads and heightening uncertainty across assets.

Currencies and stock markets tumbled in Asia while interbank rates remained fairly elevated over policy rates, even rising slightly in markets such as Hong Kong. Japan’s central bank turned more aggressive in its support for the market, pumping in a heavier than normal amount through repo transactions starting next week.

The uncertainty stemmed as much from the US government’s plan to focus the remainder of its $700 billion bailout fund on making direct investments in financial institutions and shoring up consumer credit markets as from the upcoming meeting of the Group of 20 nations.

Leaders of the 20 industralised and emerging nations meet tomorrow in Washington. “The U-turn by Paulson is spurring fears that banks won’t be able to weather the persistent financial crisis without being able to offload the troubled assets off their books to another party,” said Sue Trinh, a strategist at RBC Capital Markets in Sydney.

“And a policy u-turn in an environment of heightened uncertainty does not help confidence, in that it simply adds to that uncertainty.” The US Treasury Department initially promoted the financial rescue package approved by Congress last month as a vehicle to buy illiquid mortgage assets from banks and other institutions to spur fresh lending.

However, that plan never got off the ground and US Treasury Secretary Henry Paulson told a news conference asset purchases were not the most effective use of the funds. Dollar funding rates were barely changed in Asia, quoting at 0,1 to 0,4% for overnight funds and 2,2-2,7% for three-month funds. Three-month dollar LIBOR fell to 2,1325% overnight

Analysts suspected other risk spreads would also cease narrowing, as they have been for weeks, while markets seek clarity on Treasury’s plans. The US TED spread, the spread between 3-month treasury bills and inter-bank rates, narrowed to 199 basis points yesterday, far below their widest level of 4,6 percentage points in October yet far wider than lows around a 110 basis points in September.

“The downtrend in the TED spread tells us that the panic in the money market is over,” ING economist Tim Condon said in a note. “However, we do not expect a normal TED spread to be restored as long as banks view their counterparties as dependent on government support. The TARP flip-flopping is unhelpful in that regard.”

Three-month Hong Kong inter-bank rates rose 10 basis points to 2,1372%, reversing a steady downtrend in place since late October, as Asian currencies fell and Hong Kong dollar forwards priced that bearishness in. Overnight-indexed swaps continued to drop, reflecting both an abundance of cash and expectations for rate cuts, despite the stickiness in inter-bank rates.

The spread between three-month dollar OIS and LIBOR fell to 163 basis points on Wednesday. In India, the one-month OIS was bid at 6,25%, compared with a 7,5% central bank overnight lending rate and 9,8% one-month interbank rate. Elsewhere, the Bank of Japan undertook aggressive funding operations to start on Monday, the first day of the new monthly reserve maintenance period when a temporary scheme of paying interest on excess reserves at the central bank will take effect.

The BOJ bought 2 trillion yen of JGBs in repo agreement for one day from November 17 to November 18 at 0,43%, and also bought ¥1,6-trillion of JGBs in repos for a week from Nov.17 at 0,46%, a tad lower from 0,48% at similar repo operations earlier in the week.

“The BOJ may be sending a message that it wants to ease repo rates in the new reserve period,” said a money market trader at a big Japanese bank. “The one-day repo operation is unusual and it may just be a technical smoothing operation, but could also be a signal that it will address a gap in supply whenever possible,” he said. The yen overnight call rate was trading around the BOJ’s 0,3% policy target.

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ECONOMIAS DA OCDE ENTRARAM EM RECESSÃO

Posted by Gilmour Poincaree on November 13, 2008

Quinta-feira, 13 de novembro de 2008 – 09:11

por Natália Ferreira – Agencia Estado

PARIS – Os Estados Unidos irão arrastar vários países desenvolvidos para uma longa recessão, afirmou a Organização para Cooperação e Desenvolvimento Econômico (OCDE), prevendo que a maior economia mundial será a mais atingida durante a desaceleração atual. Segundo o órgão, as economias da OCDE como um todo entraram em recessão e irão encolher 0,3% no próximo ano e se recuperar em 2010, com um crescimento do Produto Interno Bruto (PIB) de 1,5%. A OCDE projeta que tanto os EUA quanto a zona do euro podem experimentar quatro trimestres consecutivos de contração. A OCDE reúne 30 países, que produzem mais da metade de toda a riqueza do mundo. O Brasil não faz parte da organização.

A economia dos EUA encolherá 2,8% no último trimestre deste ano e 2% nos primeiros três meses de 2009, e voltará a ter crescimento apenas no terceiro trimestre do próximo ano, prevê a OCDE.

A zona do euro terá uma recessão mais amena, com contração de 1% e 0,8% do PIB no último trimestre deste ano e no primeiro de 2009, respectivamente, acredita a OCDE. A economia japonesa irá encolher por apenas seis meses e se recuperar novamente no primeiro trimestre de 2009.

Segundo o órgão, os problemas duradouros nos mercados financeiros mundiais e o declínio dos preços de moradias são os principais motivos da desaceleração, e a volta ao crescimento não acontecerá de forma rápida. “Essa certamente não é uma recessão em formato V”, disse Jorgen Elmeskov, economista-chefe da OCDE, em entrevista, alertando que a turbulência nos mercados irá pesar sobre a economia até 2010.

Juros

Os países desenvolvidos dependerão de pacotes de estímulo fiscal para minimizar o impacto do sofrimento econômico, uma vez que os juros já estão em níveis baixos, deixando os bancos centrais com pouco espaço de manobra, afirmou a OCDE. Em suas projeções, a OCDE prevê que o Federal Reserve (Fed, banco central americano) cortará o juro em 0,50 ponto porcentual e o Banco Central Europeu (BCE) em 1,25 ponto porcentual até o começo do próximo ano. O Banco do Japão deixará o juro em 0,3% ao ano.

Segundo a OCDE, a situação é bem diferente nas maiores economias mundiais e no Japão e nos EUA o espaço para mais cortes de juro é limitado. Já a Europa está em situação um pouco melhor, com espaço para manobra tanto na parte do juro quanto na política orçamentária.

A organização alertou hoje que os equilíbrios fiscais irão piorar em todos os países desenvolvidos, à medida que os países fazem esforços para evitar a recessão. Mas isso pode não ser suficiente. “Contra um pano de fundo de desaceleração econômica profunda, estímulo macroeconômico adicional é necessário”, diz a OCDE, em relatório.

Para os mercados financeiros, a OCDE acredita que o cenário pode piorar no próximo ano. “Em 2009, os riscos estão inclinados para o lado negativo”, aponta o relatório do órgão. Esses riscos incluem mais falências de instituições financeira e as economias emergentes sendo atingidas mais duramente pela desaceleração no comércio global e por uma reavaliação de risco entre os investidores. “Mais medidas para estabilizar os mercados financeiros não podem ser excluídas”, diz a OCDE.

Elmeskov disse que o setor financeiro mereceu ser resgatado por conta de sua “importância sistêmica”, mas a OCDE não é a favor de ajuda direta do governo a outros setores, tais como a indústria automotiva, devido ao risco de “perpetuar alguns problemas, como o excesso de capacidade corporativa”. As informações são da Dow Jones.

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PROTESTERS ATTACK NISSAN’S SPANISH HQ OVER LAYOFFS

Posted by Gilmour Poincaree on November 11, 2008

Tue Nov 11, 2008 1:05pm EST

MADRID, Nov 11 (Reuters) – Several hundred people protesting against Nissan’s NISSAN'S LOGO (7201.T: Quote, Profile, Research, Stock Buzz) plans to lay off staff at its plant in Spain threw bottles, fireworks and fencing at the Japanese company’s offices in Barcelona on Tuesday.

Reuters pictures showed the demonstrators gathering in central Barcelona to protest at Nissan’s decision to cut 1,680 jobs at its factory in the city because of weak demand.

The protests coincided with demonstrations against the closure of a shipyard in Gijon, northern Spain, where protesters barricaded streets with burning tyres and set off fireworks.

When Nissan announced the layoffs in October, it said the global economic crisis had caused a dramatic drop in vehicle sales, and new environment laws had cut demand for all-terrain vehicles made at the plant in eastern Spain.

Volkswagen (VOWG.DE: Quote, Profile, Research, Stock Buzz) and Ford (F.N: Quote, Profile, Research, Stock Buzz) have also announced layoffs at their factories in Spain in recent weeks because of falling demand.

Car sales in the European Union fell 4.4 percent in the first nine months of the year from a year earlier, according to the manufacturers association ACEA.

Spain’s Socialist government had hoped that improvements in productivity would help the car manufacturing sector, but Spain has borne the brunt of the sector-wide production cuts seen in Europe because of the economic slowdown. (Reporting by Jonathan Gleave, Albert Gea in Barcelona and Eloy Alonso in Gijon; editing by Tim Pearce)

© Thomson Reuters 2008 All rights reserved

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PROTOCOLO DE INTENÇÕES DA CSP EM FORMATAÇÃO – PGE e Executivo estadual analisam interesses dos investidores para efetivar instalação da siderúrgica (Brasil)

Posted by Gilmour Poincaree on November 10, 2008

Fortaleza, Ceará – Segunda-Feira – 10 de Novembro de 2008

por Carol de Castro – Repórter

O governo do Estado discute os benefícios tributários e de infra-estrutura que serão concedidos para a Cpacidade final da siderúrgica no Pecém está prevista para 6 milhões de toneladas de placas de aço instalação da Companhia Siderúrgica de Pecém (CSP). Este movimento representa mais um passo para a instalação do empreendimento ao Ceará. O assunto será analisado em reunião nos próximos dias. A data exata ainda não foi definida, uma vez que depende do governador Cid Gomes. Os pontos em questão fazem parte do protocolo de intenções, que será assinado pelo governo e investidores. Segundo o procurador Geral do Estado, Fernando Oliveira, os pontos foram apresentados pelos investidores.

Demandas

“São necessidades de natureza tributária e de infra-estrutura”, explicou. “A Seinfra e a Sefaz fizeram um estudo e o governador agora vai dizer o que é possível ser concedido”, informou.

Oliveira acrescentou que os direitos a serem cedidos serão uniformizados de acordo com um padrão. “São os mesmos benefícios dados a todas empresas que se instalam no Ceará”, afirmou o procurador, que não deu mais detalhes. No planejamento atual da Companhia Siderúrgica do Pecém (CSP), com os investimentos da sul-coreana Dongkuk e pela brasileira Vale, a instalação da planta acontecerá em duas fases. Cada uma com capacidade de produção de 3,0 Mtpa (milhões de toneladas de placas de aço).

A infra-estrutura da primeira fase cobrirá parcialmente as necessidades da segunda fase e a capacidade final da planta está prevista para 6,0 Mtpa de placas. O início das obras da CSP está previsto para junho do próximo ano, quando deve começar a terraplanagem.

A desapropriação do terreno segue em processo sob a coordenação da Procuradoria Geral do Estado (PGE).

Outros dados sobre o projeto são mantidos em sigilo ou ainda não foram dimensionadas, como o número de empregos, diretos e indiretos, que serão gerados na construção e na operação da usina, e a data de lançamento do projeto.

Financiamento em avaliação

Os investidores também ainda avaliam como vai ser dividido o financiamento da unidade, orçada em US$ 6 bilhões.

A definição sobre a participação da japonesa JFE Steel no projeto da usina cearense deve ocorrer em dezembro deste ano, após conclusão de estudos de viabilidade.

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Posted in BRASIL, CE, CIDADES, ECONOMIA - BRASIL, EXPANSÃO ECONÔMICA, EXPANSÃO INDUSTRIAL, FLUXO DE CAPITAIS, INDÚSTRIA METALÚRGICA, INDÚSTRIAS, JAPAN, OS GOVERNADORES, POLÍTICA REGIONAL | Leave a Comment »

JAPANESE GOV’T READIES MONEY FOR NEW IMF BAILOUT FACILITY

Posted by Gilmour Poincaree on November 2, 2008

Sunday, November 2, 2008

TOKYO (AP) – Japan is ready to provide some of its ample cash for any International Monetary Fund bailouts for struggling nations to help stabilize the growing global financial crisis, the finance minister said.

Japan will make that offer along with proposals about accounting standards and other regulatory adjustments needed to fix the growing economic woes at a world summit in Washington Nov. 15, Finance Minister Shoichi Nakagawa told reporters.

Nakagawa did not say the acceptance of its proposals would be needed to get any of the money but he said Japan expects to play a greater international leadership role on the international stage.

He said the IMF has about $ 210-billion funds but that may not be enough.

“Japan is ready if that prove insufficient,” he said, adding that Japan has $ 1 trillion in possible funding from its foreign currency reserves. “We see lending to the IMF basically as risk-free.”

He did not give specifics of what Japan’s proposals may be, stressing that Prime Minister Taro Aso was still hammering out details.

Britain and Germany support the creation of an International Monetary Fund facility to help smaller economies withstand the global financial crisis, Prime Minister Gordon Brown said on Thursday.

“We discussed how we must prevent contagion over the next few days to middle-income countries including in eastern Europe,” Brown told reporters after talks with German Chancellor Angela Merkel.

“It’s vital that the International Monetary Fund plays a central role in supporting these economies. We both agreed to support a new facility for the IMF which would draw on additional resources of countries with substantial reserves.”

IMF chief Dominique Strauss-Kahn told French daily Le Monde he would propose a new regulatory strategy at a meeting next month of the Group of 20 nations.

He said he would suggest a new type of loan to relieve short-term liquidity problems in some economies, and an increase in IMF resources which he said were insufficient to meet requirements over the medium

Nakagawa reiterated his earlier remarks and the views of other Japanese politicians that Japan wishes to exercise political leadership in offering its money and experience in wresting itself out of its bad debt woes of the 1990s.

He said Europe and the U.S. have historical experience with the Great Depression, but Japan has more recent experience and is in a better position to share its expertise.

“We were able to get ourselves out of our problems without help from any other nation,” he said at the Japan Press Center.

Earlier this week British Prime Minister Gordon Brown and German Chancellor Angela Merkel said the International Monetary Fund needs more money to bail out struggling countries.

Brown has called on countries such as China and the oil-rich Persian Gulf states to fund the bulk of an increase in the International Monetary Fund’s bailout pot. The IMF is giving Hungary, Iceland and Ukraine loans and is in discussions with Belarus.

The International Monetary Fund said Wednesday it is creating a new program to get money quickly to developing countries with strong economies that are facing cash crunches in the global financial crisis.

Nakagawa said countries need to respond quickly and work together to get out of the financial problems that started with the U.S. subprime mortgage crisis and is now spreading around the world.

“Japan is taking leadership,” he said.

He said Japan was also doing its part domestically with stimulus spending packages and regulatory changes to prevent a further plunge on the Tokyo stock market.

Merkel said joint action was needed to tackle the crisis.

“I believe the cooperation of the recent weeks has shown we are on the right path,” she said. “We must make risks (in financial markets) manageable.”

Brown said this week that the IMF needed more money to deal with the fallout from the global financial crisis and called on China and the Gulf states to play their part.

Asked about Brown’s call, China’s Foreign Ministry spokeswoman responded vaguely on Thursday but kept the door open to a bigger Chinese role in international rescue efforts.

Brown’s spokesman said he welcomed the positive responses from Germany and China to the proposal “and the indication that they (China) have given that they would be prepared to consider contributing to any such fund”.

Brown has said the issue of giving the IMF more resources will be on the agenda when he visits the Gulf this weekend.

Brown said he and Merkel were “in total agreement” about what needed to be done at a Nov. 15 global summit in Washington to discuss how to reform the global financial system.

“We need to have a transparency that has not existed in every area of the banking system,” he said.

Brown voiced confidence that the leaders would agree in Washington on the need for reforms to global supervision and cross-border cooperation as well as on the need to reopen talks on a new global trade agreement.

Merkel made no mention of a German economic stimulus programme widely trailed in national media, which a senior legislator in her ruling coalition said would be worth 20-25 billion euros ($ 26 billion-$ 32 billion).

Brown defended the decision he made back in 1997 to make the Bank of England independent.

“It’s absolutely the right idea. It’s stability and an anchor for our financial and economic system,” he said.

“The Bank of England has brought down interest rates twice recently. They continue to look at what they can do for the future, but I think we’ve got to understand that the way to deal with this global problem … is by a comprehensive set of measures,” he said, referring to interest rate cuts, tax cuts and British efforts to help homeowners and small businesses.

“I think you’ll see us, in the next few days, in a position to do more to help people face what is a global problem,” he said.

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NOW, DEFLATION FEAR GRIPS US ECONOMY

Posted by Gilmour Poincaree on November 2, 2008

2 Nov 2008, 0049 hrs IST

by Peter S Goodman,NYT News Service

As dozens of countries slip deeper into financial distress, a new threat may be gathering force within Ecofin finance ministers and Ecofin governors of central banks pose for the family picture of the informal meeting of the ministers in charge of economy and finance ECOFIN, in Nice, southeastern France, Friday, Sept. 12, 2008 the American economy – the prospect that goods will pile up waiting for buyers and prices will fall, suffocating fresh investment and worsening joblessness for months or even years.

The word for this is deflation, or declining prices, a term that gives economists chills.

Deflation accompanied the Depression of the 1930s. Persistently falling prices also were at the heart of Japan’s so-called lost decade after the catastrophic collapse of its real estate bubble at the end of the 1980s – a period in which some experts now find parallels to the American predicament. “That certainly is the snapshot of the risk I see,” said Robert J Barbera, chief economist at the research and trading firm ITG. “It is the crisis we face.”

With economies around the globe weakening, demand for oil, copper, grains and other commodities has diminished, bringing down prices of these raw materials. But prices have yet to decline noticeably for most goods and services, with one conspicuous exception – houses. Still, reduced demand is beginning to soften prices for a few products, like furniture and bedding, which are down slightly since the beginning of 2007, according to data. Prices are also falling for some appliances, tools and hardware.

Only a few months ago, American policy makers were worried about the reverse problem – rising prices, or inflation – as then-soaring costs for oil and food filtered through the economy. In July, average prices were 5.6% higher than a year earlier – the fastest pace of inflation since 1991. But by the end of September, annual inflation had dipped to 4.9% and was widely expected to go lower.

The new worry is that in the worst case, the end of inflation may be the beginning of something malevolent: a long, slow retrenchment in which consumers and businesses worldwide lose the wherewithal to buy, sending prices down for many goods. Though still considered unlikely, that would prompt businesses to slow production and accelerate layoffs, taking more paychecks out of the economy and further weakening demand.

The danger of this is the difficulty of a cure. Policy makers can generally choke off inflation by raising interest rates, dampening economic activity and reducing demand for goods. But as Japan discovered, an economy may remain ensnared by deflation for many years, even when interest rates are dropped to zero: falling prices make companies reluctant to invest even when credit is free.

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Posted in BANKING SYSTEM - USA, BANKING SYSTEMS, CENTRAL BANKS, COMMERCE, COMMODITIES MARKET, DEFLATION, ECONOMIC CONJUNCTURE, ECONOMY, FINANCIAL CRISIS - USA - 2008/2009, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, JAPAN, USA | Leave a Comment »

RATE CUT FROM JAPAN, BARCLAYS SEEKS FUNDING

Posted by Gilmour Poincaree on October 31, 2008

October 31, 2008 – Reuters

Japan cut interest rates for the first time in seven years on Friday, expecting severe stress in the global economy to persist, while UK banking giant Barclays said it was raising $12 billion in capital.

Interbank lending rates fell sharply, suggesting that the moves taken by central banks and others to remove blockages in the credit system were working to some extent.

The Bank of Japan’s move followed a rate cut from the U.S. Federal Reserve earlier in the week and likely presaged the same from the European Central Bank and Bank of England next week.

Inflation in the euro zone fell to 3.2 percent year-on-year in October, the European Union’s statistics office said, data likely to ease any concerns at the ECB about rising prices.

Policymakers have been struggling to find the right response to a rapid global slowdown that has hammered corporate profits and sparked a record freefall in stock markets in October.

Fallout from the crunch continued to spread on Friday with Barclays Plc saying it planned to raise 7.3 billion pounds ($12.06 billion) in additional capital from outside investors including Gulf states Qatar and Abu Dhabi.

Earlier this month, Barclays said it wanted to raise capital but would raise it privately rather than take UK government cash, as rivals Royal Bank of Scotland, Lloyds and HBOS are.

“There has been a significant shift in the availability of capital and economic power in the world over the last five years and we’re ensuring we’re aligned with those changes,” said John Varley, Barclays’ chief executive.

Mizuho Financial Group became the second major Japanese bank this week to cut its full-year net profit forecast by more than half because of bad loans and losses in its equity portfolio.

The global downturn has come hard on the heels of the credit crunch, the worst financial crisis since the Great Depression, with investors facing what Japanese Prime Minister Tara Aso called “a harsh storm seen only once in 100 years”.

There were mixed signs about the credit crunch. Interbank rates — the cost banks charge to lend to each other — fell.

But at the ECB, overnight deposits from banks soared to a new record, suggesting banks still preferred to deposit money with the central bank than lend to each other.

Equity markets fell again, with Japan’s Nikkei closing down 5 percent on disappointment at the size of the interest rate cut.

European shares were off 0.9 percent and Wall Street looked set for a similarly weak start.

RATE CUTS

The Bank of Japan cut its benchmark overnight call rate to 0.30 percent from 0.50 percent, a slightly smaller reduction that the quarter point many had expected.

A 4-4 vote on the policy board meant the central bank governor had to cast the deciding vote.

“At a time of extreme financial uncertainty and volatility, to have a policy board so evenly split is hardly reassuring,” said Glenn Maguire, Asia Pacific chief economist with Societe Generale in Hong Kong. “Whatever the desired outcome, the fact that the board was so evenly split jeopardises that outcome.”

The rate reduction was the latest in a series globally as central banks move rapidly to try to cushion growth now that interbank lending rates have started falling.

The average benchmark interest rate in the Group of Seven countries has dropped to 2.36 percent, the lowest since April 2005, from 4 percent in August 2007 when credit markets began imploding because of mounting subprime mortgage defaults.

Economists widely expected Australia, Britain and the euro zone to cut rates next week.

CONTRACTION

The economies of Britain, Europe, Japan and the United States are contracting. The latest growth data showed the U.S. economy shrank in the third quarter, three months that included the dismantling of the Wall Street investment bank model.

After Thursday’s data showed the U.S. economy shrank at a 0.3 percent annual rate in the third quarter, investors will look to consumption and inflation data later for more evidence of decline.

Companies are also being to feel the pain.

A deal to merge General Motors Corp and Chrysler LLC has hit an impasse after the Bush administration ruled out funding for it, according to Reuters sources.

The car giants are seeking to merge as they struggle with the economic slump.

In Japan, Nissan Motor and Suzuki Motor issued profit warnings.

Along with central banks, governments around the world were waging an all-out battle to contain the fallout from the financial crisis, including by cutting taxes, taking equity stakes in banks and backing bank deposits.

The South Korean government is considering $7.3 billion in additional spending to support domestic demand, according to a local business paper, as the worst fears appeared to have dissipated about a meltdown in Asia’s fourth-largest economy.

On Thursday, Japan also unveiled a $50 billion economic stimulus package and German cabinet minister Michael Glos said Europe’s largest economy planned to introduce a range of steps worth up to $39 billion.

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MIAMI CENTER BUILDING ACQUIRED BY SUMITOMO CORPORATION OF AMERICA

Posted by Gilmour Poincaree on October 29, 2008

NEW YORK, Oct. 28 /PRNewswire/ — Sumitomo Corporation of America (SCOA) recently closed on the purchase of Miami Center building, at 201 South Biscayne Boulevard, in the Central Business district of Miami, Florida. The building, with spectacular views of Biscayne Bay and the city skyline has immediate access to Bayside Marketplace shopping & restaurant complex and the adjoining Inter-Continental Hotel Miami. Negotiations with the selling group, Crescent Real Estate Equities Limited Partnership and institutional investors advised by J.P. Morgan Asset Management – Global Real Assets, concluded on September 30, 2008 with a purchase price of $260 million.

Robert Obringer, general manager of SCOA’s Real Estate Unit, sees solid value in this latest acquisition. “We are excited to add Miami Center to our portfolio of commercial properties here in the U.S.,” explains Mr. Obringer.

“As part of our constant management of assets, we are always looking for opportunities that will maximize return on investment, and this property offers a strong upside potential for steady cash flow growth and long-term value appreciation,” adds Mr. Obringer. The building is 96% leased to multiple tenants, including major tenant, Citi Group.

Miami Center contains 782,210 square feet of rentable space on 34 floors. Designed by internationally-acclaimed architect Pietro Belluschi, and clad in Italian travertine marble, Miami Center has been a striking figure in the downtown Miami skyline since 1983. Besides its breathtaking views of Biscayne Bay and the city skyline, Interstates 95 and 395 and other major expressways are easily accessible to tenants and visitors of the complex.

Miami Center is SCOA’s third commercial real estate purchase this year. Earlier in the year, the Company acquired a 156,000 square foot, 12 story office building located at 1750 K Street, in the heart of the central business district of Washington, D.C. and a 299,540 square foot, 12 story office building in an emerging commercial area in Tempe, Arizona. SCOA also has assigned RYAN COMPANIES US, INC. as a management company of all its office buildings so that due diligence, property management, tenant leasing and other daily operations are consolidated by them.

About Sumitomo Corporation of America

Sumitomo Corporation of America (SCOA) is an integrated trading and investment enterprise with offices in 11 major U.S. cities. Established in 1952 and headquartered in New York City, SCOA is the largest wholly owned subsidiary of Sumitomo Corporation, Japan (SC), an integrated global trading firm. SCOA has diversified investments and trading businesses involved in manufacturing and marketing of consumer products, providing financing for customers and suppliers, coordination and operation of urban and industrial infrastructure products, providing logistics and transportation services, developing natural resources, distribution of steel and other products and developing and managing commercial and residential real estate. The Company has a portfolio of commercial properties with a combined market value in excess of $600 million. For more information about SCOA, visit http://www.sumitomocorp.com.

About J.P. Morgan Asset Management

J.P. Morgan Asset Management is a global asset management leader providing world-class investment solutions to institutions, individuals and financial intermediaries. The firm is responsible for approximately $1.2 trillion in assets under management (based on assets under management for the Asset Management division of JPMorgan Chase & Co. as of June 30, 2008), including more than $58.4 billion in real estate managed by J.P. Morgan Asset Management – Global Real Assets. With a 38-year history of successful investing and a staff of approximately 379 professionals, J.P. Morgan Asset Management – Global Real Assets identifies, analyzes, negotiates, acquires, develops, redevelops, renovates, operates, maintains, finances and sells assets, on behalf of its clients. J.P. Morgan Asset Management’s broad investment capabilities and framework for analyzing opportunities in today’s complex real estate and infrastructure markets provide critical insights for its institutional clients in both the public and private markets.

SOURCE:Sumitomo Corporation of America

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SPEAKING FREELY – FORGET BUSH’S WARS AND WORK WITH ASIA

Posted by Gilmour Poincaree on October 29, 2008

Oct 24, 2008

by Zhiqun Zhu

John Hay, the 37th United States secretary of state, said in 1889, “The Mediterranean is the ocean of the past, the Atlantic, the ocean of the present, and the Pacific, the ocean of the future.”

The future is now. The “Asia-Pacific century” is not a prediction any more; it’s reality. Based on purchasing power parity, three of the four largest economies in the world are in Asia – China, Japan and India. And if the United States is included, then all the top four economies are in the Asia-Pacific region.

The United States has longstanding interests in Asia. Two of the world’s potentially most explosive places are located in East Asia: the Korean Peninsula and the Taiwan Strait, where the United States has significant economic, geopolitical and strategic interests. Since the end of World War II, the US has had extensive economic interactions with Asian nations. It played an instrumental role in Japan’s post-war recovery and the economic takeoff of the four Asian “tigers” – South Korea, Hong Kong, Singapore, and Taiwan. Since the early 1980s, China has also benefited enormously from America’s huge investment and its insatiable consumer market. It is not an exaggeration that East Asia is of critical importance to America’s future.

One wonders whether the fact that Asia has not been a major foreign policy issue in the 2008 US presidential election is good news or bad news. The new US president must move beyond President George W Bush’s preoccupation with the “war on terror” and pay more attention to Asia.

Mixed legacy

On the positive side, US alliances with Japan, South Korea and Australia remain strong. In the past eight years, Japan, South Korea and Australia all had leadership changes, and in Japan’s case there have been four different prime ministers. All these Asian leaders have firmly supported America’s “war on terror”. They have all visited Washington to show solidarity with Bush.

One of the rare bright spots in Bush’s foreign policy is China. A stable and strong relationship between the United States and China is probably Bush’s greatest foreign policy achievement. Bush and his family are now considered “friends” by the Chinese government and Bush’s decision to attend the Summer Olympic Games in Beijing, though controversial at home, was welcomed by China where members of the Bush family were warmly received.

Prodded by the United States, the new Kuomintang (KMT) government in Taiwan headed by Ma Ying-jeou has abandoned the pro-independence policies of his predecessor Chen Shui-bian and has endeavored to improve cross-strait relations. As a result, military conflict in the Taiwan Strait is becoming much less likely now.

However, Bush has also failed miserably in East Asia overall, most notably with regard to the unresolved issue of North Korea’s nuclear program. Opportunities to denuclearize North Korea have come and gone during the eight years of the Bush administration.

An agreed framework was reached between the US and North Korea in 1994. Denuclearization of the Korean Peninsula seemed to be within reach. President Bill Clinton sent his secretary of state Madeline Albright to North Korea in October 2000 to talk to North Korean leader Kim Jong-il directly. Clinton was even prepared to visit North Korea himself to improve relations.

After Bush came to office in January 2001, he refused to honor the 1994 agreement and rejected direct talks with North Korea directly. After the September 11, 2001, bombings he labeled North Korea as part of the “axis of evil”. North Korea was outraged and felt cornered; it hardened its position on the nuclear issue and decided to proceed with nuclear technology. Even many South Koreans felt offended: North Korea is poor, but it is not evil.

Eventually China launched the six-party talks in 2003. The US accepted this multilateral forum for discussion but still refused to deal with North Korea directly. After tough negotiations, North Korea finally agreed, in February 2007, to shut down its main nuclear reactor in exchange for food and aid from the other five parties.

In June 2008, North Korea blew up the cooling tower of its Yongbyon nuclear reactor and handed over to the US a declaration of its nuclear activities. However, by August, the US had not removed North Korea from the state sponsors of terrorism list, as it had promised earlier, while insisting that it wanted independent verification of North Korea’s nuclear disarmament. Accusing the US of breaking its promise, North Korea then announced it had suspended disabling its nuclear facilities.

In a dramatic development, on October 11, Bush decided to remove North Korea from the list of states that sponsor terrorism. This was an encouraging step, but it may have come too late.

As a result of Bush’s policies, the new US president will face several serious challenges in East Asia.

The immediate security challenge is a nuclear-capable North Korea. Recent reports about Kim Jong-il’s poor health added complexity and uncertainty to the nuclear issue and security in East Asia.

For Washington, the shortest diplomatic route to Pyongyang is through Beijing. China has a strong interest in preventing the nuclearization of the Korean Peninsula, in part because it does not want to give Japan an excuse to go nuclear.

North Korea has not accounted for dozens of Japanese citizens abducted by North Korean agents in the 1970s and 1980s, and the new US president needs to explain to Tokyo that as important as the matter is, it should not be linked to North Korea’s denuclearization. Japan can seek to resolve the abduction issue through other channels, preferably by engaging with North Korea directly. The United States must coordinate its policy closely with China and other nations in the region in order to break North Korea’s nuclear stalemate.

Asia also poses tough economic challenges to the new president. The US must become actively involved in economic integration with Asian nations, otherwise it risks being marginalized in Asia. It cannot afford to continue to stand on the sidelines as the 10-member Association of Southeast Asian Nations and northeast Asian nations discus a regional free-trade zone.

The United States had been the dominant economic power in Asia, but now China has become the largest trading partner of almost every country in Asia. Economically, the US is already playing second fiddle. Asian economies are some of the biggest holders of US Treasury bonds with Japan and China together holding about half of all Treasury bonds sold abroad.

China has become America’s third-largest export market after Canada and Mexico, and its foreign exchange reserve is quickly approaching US$2 trillion. The recent financial crisis in the US makes it imperative for the new president to work more closely with East Asian nations. Shortly after the US Congress passed the $700 billion financial rescue package in September, the People’s Bank of China (central bank) reportedly expressed interest in purchasing $200 billion worth of US Treasury bonds. Undoubtedly, East Asia will be part of the solution to the current financial problems in America.

The biggest challenge for the US and its new president is China. The challenge from the re-emerging power of the Middle Kingdom is on all fronts. China’s economy continues to gallop forward, despite the impact of the financial crisis in the West. For many developing countries, China’s development model, the so-called “Beijing Consensus” of economic liberalization under tight political control, offers an attractive alternative to the “Washington Consensus” of the US.

After Beijing passed the Olympic test with flying colors, and after Chinese astronauts successfully conducted their first space walk, the Chinese people have every reason to celebrate. As a result, nationalism has grown even stronger in China. Dealing with this increasingly powerful and proud nation of over 1.3 billion people is no easy task – and China-US relations have become increasingly complex.

From issues ranging from trade imbalances to independence protests in Tibet, the two countries have many differences. The recent US sale of $6.5 billion worth of weapons to Taiwan certainly does not bode well for bilateral ties. The rise of China – a nation that does not share core values with the United States – will be the most pressing foreign policy challenge for the next American president.

Bush has preferred unilateralism in foreign policy, and in Asia he has preferred strong bilateral alliances built upon historical ties with key allies. But this bilateral alliance structure is rooted in Cold War ideology and is outdated today. The new American president must go beyond unilateralism and bilateralism and move towards multilateralism on a wide range of issues.

In Asia, the new American president must be a uniter, not a divider. In addition to resolving North Korea’s nuclear dilemma, fighting infectious diseases, piracy on the high seas, global warming, and financial crises all require multilateral cooperation between the United States and the nations of Asia and the world.

Zhiqun Zhu, PhD, is MacArthur Chair in East Asian Politics and associate professor of political science and international relations at Bucknell University in Pennsylvania. He can be reached at zhiqun.zhu@bucknell.edu

(Copyright 2008 Zhiqun Zhu.)

Speaking Freely is an Asia Times Online feature that allows guest writers to have their say.

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MEGABANKS TO RAISE CAPITAL AMID STOCK PLUNGE (Japan)

Posted by Gilmour Poincaree on October 28, 2008

The Asahi Shimbun – 2008/10/28

Once seen as the saviors of struggling foreign financial institutions, Japanese megabanks now plan to prop up their own financial bases to avoid disaster from the recent plunges of stock prices.

Mitsubishi UFJ Financial Group Inc. (MUFG) on Monday announced plans to increase its capital by 990 billion yen through measures including the issuing of new shares. Sumitomo Mitsui Financial Group Inc. (SMFG) is mulling a maximum 500-billion-yen increase.

Mizuho Financial Group Inc. is likely to follow suit.

Until recently, Japanese megabanks were believed to have staved off serious damage from the U.S. subprime loan crisis and were in a position to provide capital for their less-fortunate counterparts in the United States and Europe.

Earlier this year, Mizuho Corporate Bank invested $1.2 billion (about 113 billion yen) in Merrill Lynch of the United States, while Sumitomo Mitsui Banking Corp. injected 500 million pounds (about 75 billion yen) to Barclays plc of Britain.

However, the fallout from the financial crisis has hit home, as the Nikkei 225 index continues to fall to its lowest level in years, greatly reducing the value of the stocks these banks own.

MUFG had already seen its capital-to-asset ratio drop from 11.19 percent at the end of March to 10.73 percent at the end of June.

The group also expects to suffer from increased costs to write off bad loans for the current fiscal year ending in March 2009, while its latent losses are expanding because of the declining value of the stocks it holds.

MUFG’s $9 billion investment in Morgan Stanley this month also made it necessary for the group to strengthen its financial base.

The group plans to issue new common shares worth up to 600 billion yen and allocate noncovertible preferred shares worth 390 billion yen to designated domestic institutional investors.

If 990 billion yen is raised, the group’s capital-adequacy ratio will rise by 0.9 percentage point.

Likewise, SMFG faces the risk of its capital-to-asset ratio falling sharply. At the end of June, the ratio was 10.35 percent.

The financial group is also expected to suffer from higher costs to write off bad loans for smaller companies, to which the group had loaned heavily, and a decreased value of its shareholdings.

As SMFG’s own share price has fallen below half of this year’s peak, the group will likely combine the issue of preferred shares to life insurance companies with other measures.

The Mizuho Financial Group had originally planned to buy back about 400 billion yen worth of its own shares by March 2009. Now, it is considering postponing the buyback of about 250 billion yen of those shares.

Buying back its own shares would benefit shareholders because it helps raise the stock price. But the measure would also lead to a decrease in the group’s own capital.(IHT/Asahi: October 28,2008)

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PUBLISHED BY ‘THE ASAHI SHIMBUN’ (Japan)

Posted in ASIA, CENTRAL BANKS, ECONOMIC CONJUNCTURE, ECONOMY, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, INTERNATIONAL, JAPAN, THE FLOW OF INVESTMENTS | Leave a Comment »